Nvidia Joins the Debt-Fueled Infrastructure Race. Is This AI's Next Bubble Risk?

Nvidia is moving to raise up to $25 billion in debt even as it sits on $50 billion in cash and generates $119 billion in trailing free cash flow. Hyperscalers will spend over $750 billion on AI infrastructure this year and could reach $870 billion by 2027. The debt itself is not the primary risk; the key question is whether AI demand grows fast enough to justify the enormous annual infrastructure spend. The financing boom has spread beyond hyperscalers to neocloud providers like CoreWeave and Nebius, and Nvidia is reportedly seeking to tap debt markets. Some analysts note that many participants are already profitable, a contrast to past tech cycles. PIMCO has observed that hyperscalers are entering expansion from a position of strength, with large cash balances and recurring revenue streams, which could influence debt markets as AI builds out cloud and data-center capacity.