Morning Edition · Tuesday, July 28, 2026Published at 1:14 AM EDT · New York

Nvidia Falls 5% and Cedes Most-Valuable Crown to Apple as AI Financing Fears Hit Global Chip Stocks

South Korea's Kospi index fell more than 10% on Tuesday, with Samsung Electronics and SK Hynix each down about 12%, after reports that Nvidia would guarantee roughly $250 billion of OpenAI data-center debt.

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Nvidia Falls 5% and Cedes Most-Valuable Crown to Apple as AI Financing Fears Hit Global Chip Stocks

The two-year rise in artificial-intelligence stocks reversed sharply this week. Nvidia fell about 5% on Monday, July 27, and Apple replaced it as the world's most valuable company, as Israeli financial outlet Globes reported that the decline across the semiconductor sector unsettled markets worldwide. Apple's market value approached $5 trillion after a gain of roughly 1%, while Nvidia settled near $4.77 trillion, according to CNBC.

The trigger was a report, first carried by the Wall Street Journal, that Nvidia is in talks to guarantee about $250 billion in debt for an OpenAI data-center campus in Ohio, in addition to a separate arrangement to help finance OpenAI's purchase of Nvidia chips. Investors and commentators described the structure as circular financing, in which a supplier lends its customer the money to buy the supplier's own products. Several compared the pattern to the arrangements that preceded the dot-com collapse.

The selling continued in Asia. South Korea's Kospi index dropped more than 10% on Tuesday, its steepest fall in months, forcing the Korea Exchange to trigger circuit-breaker mechanisms, Reuters reported. Samsung Electronics fell about 12% and SK Hynix about 12.7%, the two chipmakers most exposed to AI memory demand. Bitcoin fell roughly 2% after the United States close, according to CoinDesk, while gold held near $4,090 an ounce.

The episode shows how concentrated the global equity advance had become. Nvidia's shares had risen only about 4% in 2026 before Monday, against a 24% gain for Apple, whose management has chosen to rent AI computing capacity rather than build it.

Part of a tracked trend

AI Capex and Circular Financing Risk

As AI infrastructure spending is increasingly funded by suppliers guaranteeing their customers' debt, each new disclosure of vendor financing will trigger repricing across chipmakers and AI-weighted indices, making the trade progressively more fragile.

Veracity: Corroborated

80/100

If true, who benefits: If the circular-financing alarm is warranted, short sellers, Apple, and critics of AI valuations gain, along with anyone positioned for a repricing of chip-heavy indices.
The nuance: The $250 billion figure describes talks that neither company has confirmed and that could still collapse, and "circular financing" is analysts' interpretation rather than a disclosed deal structure.

An open-source-intelligence read of how likely this story is true with its real nuance, not a judgment of any outlet. It assesses the claim, weighing independent and adversarial reporting. How we label confidence.

What this means

The AI capital-expenditure boom has been financed increasingly through vendor credit rather than end-customer cash flow, which means the valuations of the chipmakers, the memory suppliers, and the equity indices weighted toward them now rest on the assumption that data-center demand converts into revenue on schedule. If that assumption slips, the exposure is broad: Korean and Taiwanese exporters, United States megacap indices, and leveraged AI-infrastructure lenders all lose together, because the same small group of companies drives them all. From an Austrian view, cheap capital and supplier-financed demand are the classic conditions for malinvestment, and the correction tends to arrive when the credit chain, not the underlying technology, is questioned.

What to watch

Whether Nvidia and OpenAI confirm or reduce the reported $250 billion guarantee, because the terms will show how much of AI demand is genuine third-party purchasing rather than vendor-supported.
Credit spreads on AI-linked corporate and data-center debt, which would signal whether lenders are starting to price the circular-financing risk that equity markets began pricing this week.
Whether the Kospi and other chip-heavy Asian indexes stabilize or extend losses after circuit breakers, a sign of whether this is a repricing or a broader unwind.

Observations to monitor, not financial advice.

2 sources

Synthesized from: Globes (Hebrew) · CoinDesk