How Will The AI Capex Bubble End? Like Every Other Capex Mania Did: They Collapse When They Run Out Of Capital
Inside Today’s Issue
Essay: The Death Scramble For Capital In AI
Uncle Sam And GDP
Data Center Debt Gets A Pass
A Very Expensive Stock Market
Chart Of The Day… Skyward Specialty Insurance (SKWD)
Today’s Mailbag
Editor’s note: Today, Porter begins a multi-part series on the staggering amount of capital flowing into the build-out of artificial intelligence – and how it ends. Hint: not well.
There’s never been a deal this close to this big – ever.
Yesterday, after the market close, the Financial Times reported that Nvidia (NVDA) is assembling a $500 billion (!) financing package to keep the artificial intelligence (“AI”) build-out going. This is debt, not convertible equity. The lenders: Apollo Global (APO), Blackstone (BX), BlackRock (BLK), Brookfield Asset Management (BAM), Goldman Sachs (GS), and KKR (KKR) – the six largest shadow banks in the world.
Nvidia’s market cap is $5.25 trillion. Its most recent quarterly free cash flow (“FCF”) was roughly $49 billion. Companies that generate $49 billion of quarterly cash do not need a $500 billion financing package – unless something is very wrong.
Something is very wrong: This is Nvidia’s second capital raise in eight weeks.
On June 15, 2026, Nvidia priced $25 billion of senior unsecured notes across seven tranches — coupons from 4.25% on the 2028s to 5.625% on the 2056s. On $8.5 billion of senior notes outstanding, against $49 billion of quarterly free cash flow, the stated use of proceeds was “general corporate purposes.” But, as you’ll see… that’s not where the money is going.
And Nvidia isn’t the only AI business suddenly trying to raise enormous amounts of capital. Look at Intel (INTC), which before the open yesterday announced a $15 billion (!) common stock offering.
This on top of 12 months of capital raises:
August 18, 2025: $2 billion from SoftBank Group
August 22, 2025: $8.9 billion from the U.S. Treasury
September 2025: $5 billion private placement to Nvidia
Intel has also received $5.7 billion from CHIPS Act disbursements – federal funding to support U.S. semiconductor production. And it sold 51% of Altera for $4.3 billion and all its Mobileye shares for $0.9 billion.
Total capital raised in 12 months: $45 billion.
Intel’s capital raising is not a growth signal. It is a solvency warning. Intel’s cumulative FCF burn over the last five years was: negative $48.7 billion. All this new equity is simply papering over its losses.
