So Nvidia, the Orchestrator of GPU Supply and Demand, strikes again with yet another circular deal, once more using the favorite financing vehicle, the SPV.
I broke down the structure in the diagram below. It shows how Nvidia, a veteran of the dot-com era, seems to have learned a lesson or two and makes sure nothing lands on its own balance sheet. The debt, loans, notes, and bonds sit across dozens of SPVs, hyperscalers, and an army of neoclouds, many of which function as de facto Nvidia SPVs.
How to summarize it?
One SPV at a time.
$NVDA sells chips to a datacenter startup who pays by issuing junk bonds, and then Nvidia signs a contract to rent them back for the next 16 years even though they only last 4-6 years. What's the worst thing that could happen? 👀