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On August 16th, ahead of Nvidias (NVDA.O) highly anticipated $500 billion financing deal this week, investors were already concerned about approximately $70 billion in "shadow liabilities" that werent on the balance sheets of major AI companies but could surface in the worst-case scenario. With Nvidias latest move, the company may be providing tens of billions of dollars in so-called "residual value support" for debt transactions related to AI infrastructure development—essentially using its high credit rating to help control customers financing costs. With computing power demand surging, such guarantees are practically a "free lunch" for giants like Nvidia and Broadcom: they can expand sales to customers and AI companies without having to include the related debt on their balance sheets. These arrangements typically involve multiple stages: a special purpose entity borrows to purchase chips, the loan supported by cash flow generated from contracts with companies that will use the technology in the future. If the company stops making payments, the assets are re-leased or sold to repay the remaining debt. If a funding gap still exists, the guarantor makes up the difference. Theoretically, this process carries extremely low risk. However, some havent fully grasped this logic. DoubleLine portfolio manager Mariya Entina stated, "Its like playing the rules; youre trying to get special treatment from rating agencies to get the highest possible rating. Were entering an era of financial engineering. Thats one of my concerns: when financial engineering prevails, the true financial situation gets obscured."According to The Information, Nvidia (NVDA.O) is in talks to invest $3 billion in SB Energy as part of the OpenAI data center deal.According to Al Arabiya TV, local authorities in Marib stated that Houthi rebels fired four ballistic missiles and four drones at residential areas.The Qatari Ministry of Foreign Affairs stated that Qatar invited an Iranian delegation to visit Qatar in April to receive a detailed briefing on the search and rescue operation, but Iran has not yet responded to the invitation.Qatars Ministry of Foreign Affairs: Search and rescue teams have found the remains of an Iranian pilot and have contacted Iran to discuss the handover.
