**[AI Companies' $70 Billion Shadow Credit Guarantees Spark Bond Market Concerns, NVIDIA May Provide Tens of Billions in Residual Value Support]** BlockBeats News, August 16 — According to Bloomberg, bond investors are closely monitoring approximately $70 billion in off-balance-sheet potential guarantee obligations from major AI companies. As financing for AI chips expands, such "residual value support" arrangements may further increase. Following NVIDIA's announcement of a $500 billion financing collaboration plan this week, the company may also provide tens of billions of dollars in residual value support for related debt transactions. This type of financing is typically structured through special-purpose vehicles that borrow funds to purchase chips, relying on cash flows generated by user contracts to repay the debt. If customers cease payments, the related assets can be re-leased or sold to cover the debt. If a shortfall remains, the guarantor is responsible for covering the gap. NVIDIA CEO Jensen Huang stated that the company could provide residual value support for up to 25% of a project's value, depending on the specific project. CreditSights analysts noted that this is essentially akin to NVIDIA "selling put options": costs are low during the AI boom phase, but if the industry experiences a sharp downturn, customers default, and hardware values decline, the importance of these guarantees will significantly increase. Rating agencies have also begun to classify some of these arrangements as contingent liabilities similar to debt. Previously, Meta adopted similar structures in its $27 billion and $13 billion data center debt financing. Broadcom provided most of the residual value support for Anthropic's $35 billion AI chip financing. Moody's has warned that if such transactions increase significantly in the short term, they could limit Broadcom's financial flexibility and exert pressure on its credit profile. [Original Link]