Goldman in talks with investors on Nvidia financing deal after landing prized role, sources say

Goldman Sachs is engaged in discussions with investors for a potential participation in Nvidia's $500 billion AI financing scheme, following their involvement in securing a significant role in the deal, according to sources. The financing, recently announced by Nvidia on August 10, aims to raise capital for AI infrastructure from a variety of financial institutions, including insurers, money managers, and banks.

These institutions are expected to form the core of the investor base for the financing, while asset managers are anticipated to hold a substantial share. The move comes as a response to the increasing demand for AI computing capacity, driving institutional investors to participate in the development of data centers. Goldman Sachs, leveraging its longstanding relationship with Nvidia, can provide junior capital and private credit financing through its asset management arm, while its investment bank can assist in placing debt into private credit funds and eventually public debt markets.

The bank's central role as the sole lender on the deal, alongside other industry giants, marks a culmination of years of collaboration with Nvidia, including advising on several transactions and being a lead underwriter in a $25 billion bond sale in June and serving as an exclusive financial adviser in Nvidia's $6.9 billion acquisition of Mellanox Technologies in 2019.

The deal, which showcases the potential of private capital in funding AI infrastructure, may pave the way for more traditional funding structures, allowing debt to trade like securities and reduce funding costs.