Nvidia’s debt protection costs surge on $750B AI infrastructure spending wave

The cost of insuring Nvidia’s debt against default just spiked the most on record. Not because anything is wrong with Nvidia, but because everything is very, very expensive in AI land right now. Nvidia’s 5-year credit default swap spreads widened to 57.25 basis points, up from roughly 42 basis points in late June. That’s a meaningful jump for a company sitting on approximately $50 billion in cash. The trigger: reports that hyperscalers are gearing up to spend over $750 billion on AI data center infrastructure in 2026, with that figure potentially climbing toward $870 billion in 2027. The great AI borrowing spree That kind of capital expenditure is expected to exceed the free cash flow of even the largest hyperscalers. Which means one thing: debt. Lots of it. Nvidia has announced plans to issue between $20 billion and $25 billion in high-grade bonds around June 15, 2026. It would be the company’s first bond issuance in five years. And the market’s response suggests investors are more than willing to play along. Demand for the offering reportedly reached $85 billion, roughly a 4x oversubscription. The widening CDS spreads, then, aren’t really about Nvidia’s balance sheet. They reflec...