The scrutiny facing Jensen Huang, Nvidia’s chief executive and co-founder, is fueling concerns about the financial risk posed by the company’s extensive network of commitments supporting the artificial intelligence boom. Nvidia has pledged hundreds of billions of dollars to other industry participants, earning it the nickname “central bank of AI.” In July, the company agreed to buy up to $36 billion in cloud services, back up to $125 billion of a $500 billion Wall Street credit program and provide a $105 billion phased guarantee for a major data center project in Ohio. Regulators are monitoring these commitments because a simultaneous fall in Nvidia’s share price, difficulties for companies that borrowed to buy its chips and weakness in the bond market could reinforce one another. Unlike a bank, Nvidia has a large equity cushion and would still produce highly sought-after products, limiting the risk of a systemic crisis, while competition from AMD, Broadcom, Intel, Google, Microsoft and OpenAI could further reduce the long-term economic fallout.
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