Nvidia CEO Jensen Huang’s departure has not sent a widespread shock to credit markets, but the company’s role as an investor in artificial intelligence infrastructure has come under scrutiny.
Mr. Huang, who resigned Thursday amid espionage and extramarital affairs scandals, co-founded Nvidia and built it into an AI powerhouse in the 33 years since. Chief Financial Officer Colette Kress has been named interim CEO as the company searches for a permanent CEO.
Nvidia not only supplies its graphics processing units to hyperscalers and tech giants, but also provides loans to other companies to help expand the industry. That all could change.
“While we expect the company to deliver on all previously announced commitments, we believe it may be more difficult for the company to negotiate new multiparty investments among ecosystem partners at the same scale going forward,” Goldman Sachs analyst James Schneider said in a note Thursday.
News of Hwang’s resignation comes after investors were already concerned about the company taking on too much debt to fund its AI infrastructure.
Yields on tech bonds are rising and spreads on credit default swaps are widening, especially for lower-rated stocks. A credit default swap is a contract in which an investor pays a protection fee in case a borrower is unable to repay its debt. Widening spreads indicate that investors view bonds as riskier.
On Friday, Nvidia’s 4.5% bond due in 2031 had a yield of 5.77%, up nearly 6% since the start of the week. Bond yields move inversely to prices.
Nvidia’s 5-Year Credit Default Swap (November 13, 2026)
Tech stocks fell on Thursday. Nasdaq 100 It closed down 0.3% as the market digested the Nvidia news. Hyperscalar bond yields rose slightly on Thursday, suggesting broader concerns about AI debt persist.
Exposure to neocloud
If Nvidia makes any changes to AI funding, smaller AI companies may ultimately be affected. According to its last quarterly financial report in July, the company had $36 billion in off-balance sheet AI cloud contracts, or backstops, for NeoCloud.
neo cloud coreweave, Nevius and Airen All of these are in Nvidia’s portfolio. Their stocks plummeted Thursday.
Coreweave, which has become a symbol of AI debt concerns, eased investor concerns with Tuesday’s quarterly results, sending bond yields lower. The yield on the 9.75% bond due in 2031 was 14.75% on Friday, after rising to 16.7% last week. Five-year CDS spreads have also fallen 18% since the start of the week, but remain above 1,000, which is generally seen as a sign of distress.
CoreWeave’s five-year credit default swap will occur on November 13, 2026.
CreditSights analyst Andy Lee said it remains unclear how NVIDIA’s support for these companies will change.
“We don’t know what NVIDIA’s ultimate strategy will be on the other side,” he said.
“But directionally, given the fact that Mr. Jensen has been so important in selling the NVIDIA story and has been a very active deal maker, I think a lot of this creative deal-making, circular financing, equity and credit support will probably be curtailed,” he added.
CoreWeave CEO Michael Intrator told CNBC on Wednesday before Huang’s departure that Nvidia is “not one person.”
“There are thousands of people there that interact with thousands of people in my company every day. They integrate with technology, they integrate with physical infrastructure, they integrate with networking,” he said in an interview on “Squawk on the Street.” “They have been a great partner for us over the years and will continue to be a great partner for us in the future.”
Bob Lang, founder and chief strategist at Explosive Options, doesn’t see much change in terms of NVIDIA’s relevance or ability to raise capital for now. He noted that as CFO, Kress is involved in financing transactions, and the search for a permanent CEO will take time.
The real question is how much money the company is willing to lend in AI financing, rather than using its hundreds of billions of dollars in free cash flow for other purposes like stock buybacks, capital spending, and acquisitions.
“Big companies like Nvidia and Meta hold all the cards,” he said. “Once they decide the game is over, that’s it. The curtain will come down on some of these small businesses.”
—CNBC’s Kif Leswing and Isabel O’Brien contributed reporting.
