Why Wall Street and Nvidia Are Building an Exotic Money Pipeline for the AI Boom
Executives involved are hailing it as a new asset class, but critics have concerns about using chips as collateral.
Major Wall Street banks and investors have teamed up to provide Nvidia with $500 billion in capital to fuel the artificial intelligence (AI) infrastructure boom. The chipmaker announced that it had struck deals with a range of financial institutions, including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, marking the first time that AI hardware and infrastructure, often referred to as "compute," has been treated as an asset class.
Nvidia's CEO, Jensen Huang, emphasized that "in AI, compute is revenue," highlighting the company's role in bringing together leading long-term capital providers to independently underwrite AI infrastructure.
The financing will be allocated towards Nvidia's own projects and those being developed by its partners. Potential infrastructure projects may include the construction of new data centers to house, operate, and cool vast arrays of stacked computer chips that process AI data and actions. The fund will also support the creation of new factories to manufacture AI chips required to power these systems, thereby increasing their availability to buyers.
KKR's co-chiefs, Joe Bae and Scott Nuttall, stressed that "compute has become a critical infrastructure asset," noting that the hard part lies in delivery rather than ambition.
In a statement on Monday, Huang described Nvidia's position as a chip-maker as the company's beginning, stating that today they are helping create a new class of productive, investable infrastructure: AI factories. With additional funding from the partnering banks and investors, Nvidia will be better positioned to finance more of the AI boom.
Jim Zelter, president of Apollo, a lender managing over $1 trillion in assets, highlighted that "modern compute has emerged as a scarce, mission-critical asset class" and is "positioned to drive significant long-term economic growth and productivity gains." BlackRock recently entered into a deal with Meta to finance and take a majority stake in a data center in Texas, while Anthropic recently secured an investment in AI infrastructure from Macquarie Asset Management and GIC, a sovereign wealth fund in Singapore.
Written by urgent.news from KahawaTungu's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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