Nvidia, Meta Have $300 Billion AI Problem
Source: GuruFocus.com ·
Investors may be overlooking what sits beyond reported debt
From the source
This article first appeared on GuruFocus . Big Tech's artificial-intelligence boom is creating a new financial risk investors may not see clearly on corporate balance sheets. Nvidia ( NASDAQ:NVDA ), Meta Platforms ( NASDAQ:META ), Broadcom ( NASDAQ:AVGO ) and other technology companies have provided as much as $300 billion in guarantees supporting AI data centers and chips over the past year, allowing the infrastructure buildout to accelerate while leaving much of the potential exposure outside conventional debt. Warning! GuruFocus has detected 4 Warning Signs with NVDA. Is NVDA fairly valued? Test your thesis with our free DCF calculator. The structures typically guarantee a minimum future value for data centers or computing equipment owned by special-purpose entities. That makes projects easier and cheaper to finance, but the technology company can become responsible for part of the shortfall if those assets eventually fetch less than the guaranteed amount. The scale is becoming…