While the Senate has gone out for August vacation without passing the “reconciliation” $350 billion portion of the defense budget, or its Section 1217 “Israel-U.S. defense merger,” Nvidia’s latest $500 billion “deal” with Wall Street for the data center-AI buildout by “hyperscalers” like Alphabet and Meta, has put that bubble over the $1.5 trillion mark in expected and supposedly committed investments. Nvidia’s CEO, Nelson Huang, told CNBC that his company’s semiconductor chips are now an “investible infrastructure asset.” That would be as if Wall Street banks and hedge funds in the 1930s had “owned” sections of poured concrete, while the Hoover Dam was being built. Both the amounts and the means of leverage being used are unprecedented—and the required investments are bound to go to higher, not lower, leverage as the centers are actually built.
The boom is now drawing in particularly euro-area leverage, as the dollar market leverage available is getting strained, according to CNBC today. One hedge fund has already become the poster child by going bankrupt—ironically called Situational Awareness, the fund thought it had $45 billion in assets, but really had less than $10 billion.
