# Nvidia CEO Dismisses CoreWeave Default Risks Amid Rising Credit Swap Costs Jensen Huang maintains optimism for CoreWeave despite record credit default swap pricing and debt concerns. - **Source:** [The Next Web](https://brifing.si/source/afe24b20-b275-4c19-b9a6-8bb3c8babae7) - **Published:** 2026-10-15 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/0f9e24c3-3fb3-411e-836b-671f66c7194d ## Huang Rejects Financial Backstop Claims Jensen Huang recently stated in Stockholm that Nvidia has no intention to backstop CoreWeave. Despite market skepticism, the CEO maintains that CoreWeave’s financial position is strengthening daily. He explicitly noted that the company's cost of capital is currently decreasing, contradicting the bearish sentiment reflected in the latest credit default swap market data. ## Record Credit Default Swap Spikes CoreWeave’s five-year credit default swaps reached an all-time high of 1,194.5 basis points. This surge, recorded by ICE Data Services, indicates a market-implied probability of default exceeding 60% within the next five years. This represents a significant increase from the 452 basis points observed in June, signaling heightened investor anxiety regarding their debt. ## Debt Accumulation and Capital Spending CoreWeave’s total debt reached approximately $30 billion in June, tripling the figure from the previous year. While the company holds a speculative-grade rating, it maintains a massive $99.4 billion backlog as of July. Their capital spending budget for 2026 is projected between $31 billion and $35 billion to support ongoing infrastructure expansion efforts. ## Nvidia’s Strategic Equity Position Nvidia currently holds a 10% stake in CoreWeave, making it the second-largest shareholder. Beyond equity, Nvidia serves as the primary hardware supplier for CoreWeave’s data center operations. This dual role as investor and vendor creates a tight operational dependency that critics argue could potentially distort demand signals for high-end AI hardware. ## Circular Demand and Systemic Risks Critics and institutions like the IMF have flagged the circularity of Nvidia guaranteeing debt for customers who then purchase Nvidia hardware. Huang has dismissed these concerns as ridiculous. However, the market remains sensitive to these arrangements, as evidenced by Nvidia’s own five-year credit swaps hitting a record 82 basis points in July. ## Potential OpenAI Financing Negotiations Reports suggest Nvidia is in separate talks to backstop $250 billion in financing for OpenAI’s data center projects. This potential guarantee would cover lease and construction debt for a massive 10-gigawatt campus in Ohio. Neither Nvidia nor OpenAI has officially confirmed these discussions, leaving the scale of the financial commitment currently unverified. ## European Expansion and AI Strategy While addressing financial concerns, Huang is actively promoting European AI investment. He promised $2 billion in regional funding and announced a new Stockholm AI lab in partnership with the Norrsken Foundation, scheduled to open in 2027. This move aims to position Nvidia as a central player in Europe’s developing sovereign AI infrastructure. ## Market Implications of Financial Exposure The simultaneous occurrence of record debt pricing for CoreWeave and Huang’s European expansion tour highlights the tension between growth and risk. Investors are closely watching how Nvidia manages its exposure to speculative-grade customers. The sustainability of this hardware-driven growth model remains a focal point for analysts monitoring systemic risks in tech. ## Sources covering this story - https://thenextweb.com/news/huang-coreweave-backstop-stockholm — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._