Nvidia's $250 Billion Question: When a Chipmaker's Guarantee Becomes the Market's Biggest Fear
Published on 07/28/2026 at 15:12 | Redaktion boerse-global.de
For a company that just reported blowout earnings and commands a market cap that has reshaped the entire S&P 500, Nvidia finds itself in an unusual position: explaining why a deal that hasn't even been signed is worth worrying about.
The stock slid 5.02 percent on Monday to €172.88, shaving billions from its valuation in a single session. The trigger wasn't a missed sales target or a competitor's breakthrough. It was a rumor — still unconfirmed — that Nvidia is negotiating a guarantee of up to $250 billion for OpenAI's data center project in Ohio, with an additional $350 billion in chip purchases potentially financed through the same structure.
The numbers are staggering. Nvidia's most recent quarterly filing caps its total guarantee exposure for leasing arrangements at $3.5 billion. A $250 billion commitment would be roughly 71 times that figure. No wonder investors are asking whether this represents strategic strength or a warning signal that the AI economy can't stand without artificial support.
The Deal That Isn't a Deal Yet
Here's what's actually known: Nvidia is reportedly in early-stage talks to backstop a massive data center hub being developed by SB Energy, a SoftBank subsidiary, in Ohio. The complex is designed for 10 gigawatts of capacity and carries a projected investment of $500 billion. OpenAI would lease the computing power. Nvidia would guarantee the leasing and construction financing.
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Neither company has confirmed the structure. Both declined to comment when approached. The discussions remain fluid — they could collapse, or the terms could shift materially.
The market's reaction reveals something deeper than concern about one transaction. It exposes a growing unease about the circular financing structures that have come to define the AI boom. Nvidia invests in or guarantees companies that then buy Nvidia's chips, creating a feedback loop that can obscure genuine end-user demand.
Two Camps, One Stock
The bull case is straightforward. Nvidia is using its fortress balance sheet to secure demand in a market where chips remain scarce. Building AI infrastructure is capital-intensive, and the best hardware is still hard to come by. A simple purchase order no longer suffices — companies lock in supply by bundling financing with commitments.
CEO Jensen Huang has forcefully rejected the circular financing narrative. When questioned about a previous investment in CoreWeave, he dismissed the idea as absurd, arguing that the sums involved are a fraction of what customers would need to raise in capital markets anyway.
Morningstar analysts share that view, calling the OpenAI concerns overblown. They point out that AI token usage continues to grow exponentially and that hosting providers are constrained by computing capacity, not demand. The guarantee arrangements, they argue, are growth accelerators — tools that help Nvidia sell more hardware and speed up AI adoption.
The bear case paints a different picture. Investor Michael Burry described the arrangement as further evidence of a self-reinforcing loop, commenting simply: "Round and round it goes."
A Bloomberg-quoted strategist put it more bluntly: if Nvidia guarantees even more of OpenAI's data center debt, it deepens a vendor financing structure already under scrutiny. That looks as much like financial stress in AI infrastructure as it does a demand signal.
The complicating factor is that OpenAI itself lacks an investment-grade credit rating. The entire construction is designed to let SB Energy borrow against Nvidia's balance sheet rather than its own — a workaround that raises questions about who ultimately bears the risk.
Beyond OpenAI: The Broader Selloff
The Nvidia news didn't arrive in a vacuum. It hit a sector already rattled by two developments out of China that same week.
ChangXin Memory Technologies (CXMT) made its debut on Shanghai's A-share market with a 466 percent surge — the largest IPO by a Chinese semiconductor company on the mainland ever. The listing directly threatens memory chip makers like Micron and SK Hynix, though analysts note that CXMT's revenue comes primarily from commodity DRAM, not the high-bandwidth memory (HBM) chips that power AI servers and generate the highest margins.
A day later, a Shanghai-based company backed by the Chinese government reportedly began producing its own DUV lithography machines — the systems that ASML has long dominated. ASML shares fell 5.26 percent to €1,383.20, their steepest single-day drop in weeks. The Chinese systems are said to lag significantly in performance and reliability, with only a few dozen units planned over the next two years, but the symbolic weight of a domestic challenger was enough to rattle investors.
The Winners Wearing Losers' Clothes
The sector's selloff masks an operational reality that looks remarkably healthy for most of the companies involved.
Nvidia trades at €172.26, roughly 15 percent below its 52-week high reached in May. Yet it recently announced a long-term partnership with Safe Superintelligence, the AI lab founded by former OpenAI co-founder Ilya Sutskever, and secured an HBM4 memory agreement with SK Hynix as part of a broader SK Group partnership valued at over $500 billion.
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Micron dropped 6.86 percent in a single day to €735.40 — and still sits on a year-to-date gain of 191.71 percent. SK Hynix fell 14.65 percent in Seoul, the sharpest decline in the entire semiconductor universe, yet remains up 138.57 percent since January.
ASML had raised its annual guidance for the second time just weeks before the selloff, projecting revenues well above analyst expectations. The lithography giant's business is running smoothly; the stock is reacting to a competitive threat that remains years from materializing.
AMD slipped 4.32 percent to €415.75 ahead of its August 4 earnings report. CEO Lisa Su recently outlined a potential $2 trillion computing market by 2030 and stressed that AI demand shows no signs of slowing. Baird responded with one of the most aggressive price target increases in the sector, doubling its target while maintaining a buy rating.
What Comes Next
The Federal Reserve meets July 28-29, with a rate decision expected Wednesday afternoon. Microsoft, Meta, and Amazon report earnings this week, and their capital expenditure commentary will directly influence Nvidia, AMD, and the memory chip sector.
AMD's August 4 report is increasingly viewed as a litmus test for whether AI accelerator demand can outweigh valuation concerns. For Micron, SK Hynix, and ASML, the question is whether China's advances in DRAM and DUV lithography force a permanent revaluation of the sector — or represent another bout of uncertainty in a cycle that has recovered from every pullback so far.
Nvidia's stock now sits between its 50-day and 200-day moving averages. A confirmed deal with clearly limited guarantees could reframe the guarantee as a demand-securing mechanism and support a recovery. A collapse in talks, or further expansion of the guarantee structure, could push shares toward the 200-day average at €166.18 — or worse, toward the 52-week low of €139.78.
The semiconductor sector now accounts for roughly one-fifth of the S&P 500, compared to about eight percent during the dot-com era. When a fifth of the market catches a cold, the entire index sneezes. The next few trading days will show whether this is a correction or the beginning of something more serious.
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