Nvidia's off-balance-sheet backstops hit $530B in latest 10-Q

Nvidia's 2Q F1/27 10-Q disclosed $530B of gross off-balance-sheet guarantees across six line items, up from $184B the prior quarter. SemiAnalysis lays out the arithmetic in its latest note: $279B in supply and capacity commitments, $108.5B in guarantees on SB Energy's PORTS-Pike campus in Ohio (4.25 GW leased to OpenAI for twenty years), $36B in AI cloud take-or-pay floors, and roughly $20B in datacenter leases Nvidia expects to reassign.

The AICP program, Nvidia's AI Cloud Partner arrangement, is where the take-or-pay floors sit. Three deals are disclosed so far: Firmus at $21.1B on a 360 MW build in Batam, SharonAI at $4.2B, and an estimated $2.2B for GMI. The floor rate the report cites is roughly $2.35 per GPU-hour against a market rate SemiAnalysis pegs at $4.50 to $4.60.

The setup is asymmetric by design. "Heads, demand holds and Nvidia wins twice, once on the GPU sale at full margin and again on the revenue share above the floor," the authors write. "Tails, demand falls and the Neocloud makes no money but remains solvent." Their bottom line: "Risk reward is asymmetric in Nvidia's favor as long as its balance sheet remains strong."

That "as long as" is where the report leans in. Nvidia carries $91B in on-balance-sheet liabilities today, $33.4B of it total debt, against a $22B cash balance and an investment book that has grown to $128B from $45B. Residual value guarantees, capped at 25% under the capital partnership structure, sit at $55B at F1/27 in the report's model and are projected to climb to $373B by F1/31 as the roughly $2.5T of funding the buildout targets works through. Consensus EBITDA of $441B in F1/28 and a $1.4T projected cash balance by F1/31 are what has to cover the tail.

The authors also flag that Nvidia is not the whole story. "The Gigascalers are the implicit backstop of the buildout and are in aggregate far larger force than Nvidia's backstopped capacity," they write, with roughly 15 GW leased by gigascalers in 2026 and past 35 GW by 2028 against Nvidia's own ~6.5 GW of direct backstop. The $11T cumulative capex figure they use for CY24-CY29 is the pool that has to earn out.

Nvidia loses, they write, "only if the backstopped Neoclouds fail to meet their lease and offtake commitments at the same time that Nvidia's own business and cash generation slow."