黄仁勋因丑闻辞职，英伟达股价开盘暴跌14%

SCARLET: FROM NEW YORK CITY, FOR OUR VIEWERS WORLDWIDE, I'M SCARLET FU. "BLOOMBERG REAL YIELD" STARTS RIGHT NOW. COMING UP, NVIDIA FOUNDER AND CEO JENSEN HUANG STEPPING DOWN AFTER REPORTS OF EXTRAMARITAL AFFAIRS INCLUDING ONE WITH AN ALLEGED CHINESE SPY. HIS EXIT TESTING THE TECH GIANT'S ROLE AS THE CENTRAL BANK OF AI. WARNINGS THAT MORE AGGRESSIVE RATE HIKES MIGHT BE NEEDED. TREASURY BOND YIELDS SPIKING THE MOST SINCE THE TARIFF MELTDOWN ON THE HAWKISH FED SPEAK FOLLOWING HOTTER THAN RESPECTED CPI REPORT.

YOU BEGIN WITH THE BIG STORY OF THE DAY, NVIDIA SHARES PLUNGING 14% AT THE OPEN, NOW DOWN ABOUT 5%. THIS AFTER CEO JENSEN HUANG RESIGN FOLLOWING THE REVELATION OF TWO AFFAIRS, ONE WITH AN ALLEGED CHINESE SPY. ED LUDLOW JOINS US. THIS COMES BEFORE THE COMPANY'S EARNINGS REPORT TUESDAY AND PLANS FOR JENSEN HUANG TO TESTIFY BEFORE CONGRESS. WHAT CAN YOU TELL US ABOUT WHERE THINGS STAND WITH THE EARNINGS REPORT AND THE TESTIMONY?

ED: THE CFO IS BECOMING INTERIM CEO, STILL RETAINING THE CFO TITLE. THE BOARD OF NVIDIA WILL LOOK AT INTERNAL AND EXTERNAL CANDIDATES FOR A LONG-TERM SUCCESSOR TO JENSEN HUANG. BLOOMBERG CLARIFY THAT GOING FORWARD, JENSEN HUANG WILL NOT HAVE ASSOCIATION WITH NVIDIA. YOU WILL NOT TAKE ON AN ADVISORY ROLE, HE WILL NOT BECOME CHAIRMAN EMERITUS. THAT HAD NOT BEEN CLEAR FROM THE STATEMENT. THE STOCK IS ON TRACK FOR ITS BIGGEST DROP SINCE JANUARY 2025.

THERE IS THE BREAKING THE LAST THREE MINUTES -- BLOOMBERG IS CONFIRMING THAT THE JUSTICE DEPARTMENT IS CONDUCTING AN ESPIONAGE PROBE INTO ALICE HUANG 'S RELATIONSHIP WITH JENSEN HUANG. JENSEN HUANG IS NOT A TARGET OF PROBES BY U.S. LAW ENFORCEMENT. JENS NORDVIG NOT A TARGET OF PROBES BUT--JENSEN HUANG IS NOT A TARGET OF PROBES BY U.S. LAW ENFORCEMENT. THEY ARE MISSING REPORTS THAT ALICE HUANG SMUGGLED SERVERS INTO CHINA, DIFFERENT FROM THE INVESTIGATION OF ALICE HUANG SMUGGLING CHIPS INTO CHINA.

SCARLET: GIVE US THE VIEW FROM SILICON VALLEY. WHAT IS THE CHATTER LIKE, WHAT IS THE CONVERSATION LIKE AMONG FOLKS YOU TALK TO, TE H COMMUNITY-- TECH COMMUNITY, CLIENTS, SUPPLIERS, ALL OF THAT? ED: PEOPLE ARE THINKING OF WHO IS THE RIGHT TECHNOLOGIST TO NVIDIA GOING FORWARD. WITH ALL DUE RESPECT -- THIS IS ON AN INTERIM BASIS, SHE IS NOT SEEN AS THE RIGHT PERSON TO MAINTAIN NVIDIA'S NEAR MONOPOLY IN THE MARKET FOR COMPUTE.

OTHER NAMES INCLUDE -- THE PRESIDENT OF THE UNITED STATES TOUTED TIM COOK. THERE IS A VERY BIG CAMP ACROSS INVESTORS. CEOS OF AI LABS, ECOSYSTEM THAT RELIES ON NVIDIA COMPUTE THE FEEL IT SHOULD HAVE BEEN PUT TO A SHAREHOLDER VOTE -- HE RESIGNED. WE KEEP SAYING HE WAS OUSTED, BUT HE RESIGNED. MANY PEOPLE FELT HE SHOULD STAY IN THE POST IRRESPECTIVE OF INFIDELITY. PEOPLE MAKE MISTAKES -- AND PARAPHRASING--I AM PARAPHRASING PEOPLE'S VIEWS.

SCARLET: THANK YOU, ED LUDLOW. KEEP IT BLOOMBERG TELEVISION FOR ALL-DAY COVERAGE OF THE STORY. NATHANIEL ROSENBAUM JOINED US ON BLOOMBERG TO BREAK DOWN NVIDIA'S ROLE IN THE TECH BOOM.

WHEN I THINK ABOUT NVIDIA, IN THE HIGH-GRADE MARKET IT IS REALLY SMALL. $35 BILLION IN DEBT, TINY THESE DAYS. I DON'T THINK THIS HAS BROADER RAMIFICATIONS. CREDIT SPREADS ARE TIGHTER ON THE BACK OF ALL OF THIS NEWS. IN TERMS OF BEING A BACKSTOP FOR OTHERS, AND IS CLEARLY AN IMPORTANT ROLE THAT NVIDIA HAS PLAYED IN THE BROADER AI ECOSYSTEM. THAT IS GOING TO BE QUESTIONED IN THE DAYS AHEAD. SCARLET: LET'S DIG INTO ALL OF THIS WITH OUR CREDIT ROUNDTABLE.

MAUREEN O'CONNOR IS THE DIRECTOR OF HIGH-GRADE DEBTS, GET AT WELLS FARGO AND SUZANNE, GIBBONS OF KICKER. I KNOW YOU FOCUS ON HIGH-YIELD AND OPPORTUNISTIC CREDIT, BUT I'M CURIOUS WHAT YOUR TAKE IS ON THIS NVIDIA DEVELOPMENT ON THE PRODUCT CREDIT MARKET. THERE IS AN ARGUMENT IS A BIG DEAL FOR EQUITIES THAN SAFER CREDIT.

I'VE OBSERVED A REAL CAPAND UNDERSTOOD-- GAP IN UNDERSTANDING BETWEEN THE CREDIT AND EQUITY MARKETS IN TERMS OF THE CREDIT MARKETS BEING CONCERNED ABOUT THE SPEED OF THE BUILDOUT AND HOW MUCH OF IT HAS BEEN FINANCED AND CREDIT. EQUITY INVESTORS HAVE BEEN MORE SANGUINE. I THINK THAT IS BECAUSE THEY ARE LOOKING AT THE HYPERSCALER DEBT ON THE BALANCE SHEET AND THEY ARE SEEING IT IS NOT TROUBLING IN TERMS OF LEVERAGE LEVELS AND THE CREDIT IS WELL COVERED.

FOR CREDIT INVESTORS, THEY ARE LOOKING AT THE BROADER CREDIT ECOSYSTEM. THAT'S HITTING THE MARKET TODAY, FROM SUPPLY, DEMAND, TECHNICAL, DATA CENTER FINANCINGS, CHIP FINANCINGS. QUESTION WITH THIS NEWS THAT THERE IS A CHANGE IN STRATEGY FROM THE COMPANY, THAT COULD RESULT IN MORE DIRECT DEBT BEING ISSUED IN THE I.T. MARKET, TO THE EXTENT THAT THERE IS A CHANGE IN THE GUARANTEES THAT THE COMPANIES HAVE BEEN ISSUING THAT IS ALLOWED -- THINK OF NVIDIA WITH PRIVATE CREDIT -- THAT HAS ALLOWED FOR THE OFF-BALANCE SHEET DEBT TO BE RAISED.

SCARLET: YOU COVER INVESTMENT GRADE. WHAT DO YOU THINK OF THE FORECAST OF MORE EDUCATED BEING ISSUED? MAUREEN: WE HAVE A BALANCED VIEW AROUND SUPPLY FROM THE HYPERSCALERS. WHEN YOU LOOK AT WHAT WAS FUNDED THIS YEAR, WE WENT THROUGH A BIT OF A SUPPLY SHOCK. OVER $200 BILLION OF HYPERSCALER SUPPLY, JUST THE BIG FIVE NAMES, SOME OF THE DATA CENTER DEALS THAT OF COME TO MARKET, THE NVIDIAS AND SPACEX'S OF THE WORLD. WE ARE REACHING A POINT OF MAXIMUM MARKET CAPACITY IN THE IG SPACE.

WHEN YOU THINK OF THE PUSHBACK FROM INVESTORS WITHOUT THESE BORROWERS TELEGRAPH THEIR CADENCE TO MARKET, WE RECOGNIZE A BIT OF A PIVOT POINT, AND WE ARE OVER AND ABOVE THAT SIZE. THE CADENCE TO MARKET BEING ANY MORE FREQUENT THAN TWICE A YEAR, INVESTMENT GRADE MARKET. ONE OF THE MORE INTERESTING EVOLUTIONS NEXT YEAR IS THE OFF-BALANCE-SHEET GPU FINANCINGS, WHICH WILL TAKE ON A SLIGHTLY DIFFERENT COMPLEXION IN TERMS OF DURATION OF SUPPLY, WHERE HYPERSCALERS ISSUE LONG, 15 YEARS ON AVERAGE.

A LOT OF THIS FINANCING WILL BE FOCUSED ON A THREE-Y WAITEDEAR-- THREE-YEAR WEIGHTED AVERAGE INSTRUMENTS. SCARLET: IF YOU LOOK AT THE CREDIT DEFAULT SWAPS OF SOME OF THE DEBT, NVIDIA'S DEFAULT RISK INCREASED BECAUSE OF JENSEN HUANG AND THE UNCERTAINTY OF WHAT IS GOING TO HAPPEN NEXT. THAT IS THE WHITE LINE AT THE VERY TOP. THE HYPERSCALERS HAVE GONE DOWN, SIGNALING LESS RISK. MAUREEN, WHY DO YOU THINK WE HAVE THAT DIVERGENCE?

MAUREEN: THE NVIDIA STORY IS AN EQUITY STORY MORE THAN A CREDIT MARKET STORY. THEY WILL ENJOY DEEP ACCESS TO THE INVESTMENT-GRADE BOND MARKETS. YES, THERE WAS A KNEE-JERK WIDER REACTION TO THE SPREADS, BUT THE VOLATILITY IS A LOT WIDER IN THE IG CREDIT MARKETS. I WITH YOU NORMALIZATION ONCE WE GET PAST THIS PERIOD OF UNCERTAINTY. THE CDI IS TIED TO THE RISK ON BANKS' BALANCE SHEETS AND VIEW OF WHERE PUBLIC INVESTORS ARE.

VOLATILITY HAS BEEN A LOT LOWER. SPEAKING OF SOME OF THESE OFF-BALANCE-SHEET STRUCTURES, BANKS ON A LOT OF THIS. ON THE BALANCE SHEET THEY HAD A LOT OF HIS AND THAT IS WHERE YOU ARE SEEING SOME OF THE VOLATILITY. SCARLET: WE KNOW THAT NVIDIA WAS APPLYING A LOT OF CAPITAL TO THE AI ECOSYSTEM. HE IS CALLED THE CENTRAL BANKER OF AI FOR A REASON. PUSHED A LOT BY JENSEN HUANG AND HIS OWN CONNECTIONS. NOW THAT HE IS OUT OF THE PICTURE, HE IS NOT GOING TO PLAY ANY ROLE AT THE COMPANY.

DOES THIS REMOVE A LOT OF THE FROTH THAT SOME PEOPLE SAY WE SEE IN THE CREDIT MARKET AND USES THAT RISK?-- DEBVT RISK? SUZANNE: IT'S A GOOD QUESTION. GOING BACK TO MY EARLIER POINT, THIS YEAR ALONE WE HAVE HAD AS MUCH CREDIT ISSUANCE AI-RELATED AS HALF THE SIZE OF THE HIGH-YIELD BOND MARKET THE U.S. STAGGERING NUMBERS. A LOT OF IT IS AWAY FROM IG HYPERSCALERS. A LOT OF IT DEPENDS ON LONG-TERM LEASES FROM THOSE COMPANIES AND COMMITMENTS FROM CHIP COMPANIES AS WELL IN TERMS OF GUARANTEES.

THERE COULD BE A CHANGE IN STRATEGY. REGARDLESS, THE ESTIMATES ARE THAT QUANTUM ISSUANCE IS ONLY EXPECTED TO GROW EACH OF THE NEXT TWO YEARS. I'VE SEEN ESTIMATES OF ABOUT A TRILLION ACROSS CREDIT MARKETS. THESE ARE STAGGERING NUMBERS. THE CONVERTIBLE BOND MARKET ALONE HAS HAD RECORD ISSUANCE THIS YEAR. MORE THAN HALF OF IT IS RELATED TO AI. THE REAL STORY IS THAT EVERY SEGMENT OF CREDIT IN SOME FORM OR ANOTHER IS GETTING HIT WITH THIS ISSUANCE.

WHETH