Billionaire “Bond King” Jeff Gundlach is warning that Wall Street’s latest attempt to keep the AI boom financed may be a signal that risk markets are nearing a top.
The DoubleLine Capital CEO took aim at Nvidia Corp. (NASDAQ:NVDA) and its partnerships with six financial giants designed to mobilize more than $500 billion for AI infrastructure, questioning whether fast-evolving chips make suitable collateral for long-term debt.
"Assets of unknown life as collateral for long term debt?" Gundlach wrote on X. He said the plan "will not likely age well," comparing it to issuing 30-year asset-backed securities against warehouses of "newly engineered bananas of unknown life."
Nvidia Is Finding New Pools of Money for the AI Boom
Nvidia last week teamed up with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on financing platforms targeting more than $500 billion for AI infrastructure.
The money is largely outside capital, with the platforms designed to channel institutional money into the buildout rather than put the burden on Nvidia’s own balance sheet.
Nvidia CEO Jensen Huang has said the company may provide residual-value support on up to 25% of individual opportunities, while the memoranda remain subject to final agreements.
Ben Thompson, founder of the influential tech strategy publication Stratechery, argues Nvidia isn’t providing that backing for free. Backstopping the resale value of its own chips is "in a certain sense, a price cut" that never appears in Nvidia’s headline GPU prices, he wrote.
Nvidia has made the opposite case on the useful life of its chips.
In a blog post last week, Huang said its compute can remain economically useful for years because it serves multiple workloads, can be redeployed and improves through software updates.
He pointed to the A100, launched in 2020 and still in active commercial use six years later, with some multi-year deployments that could extend its economic life to a decade.
Prediction Market Traders Still See Nvidia Upside
Prediction market traders still see room for Nvidia to climb. Polymarket currently gives the stock a roughly 51% chance of touching $232 before the end of August, and a 28% chance of $240.
Nvidia reports second-quarter earnings on Aug. 26.
Gundlach later framed the financing push as a potential market-top signal.
"It is said no one ‘rings a bell’ at risk market tops," he wrote, "but there are declarations of ‘new asset classes’ involving ‘financial innovation’ abetted by ‘questionable ratings.’"
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