Jensen Huang says Nvidia's AI chips carry "the lowest" risk of any asset and could serve as collateral for debt

Nvidia CEO Jensen Huang has declared the company's AI accelerators as possessing the lowest risk of any asset and potentially serving as collateral for debt. Speaking at Nvidia's GTC conference in Berlin, Huang highlighted the company's AI accelerators as being productive, fungible, and durable, asserting their extended eight-year lifespan.

This longevity contrasts with the traditional four-year cycle typically associated with graphics processors. Huang argued that investors and lenders should reconsider their evaluation of investments in AI infrastructure, as Nvidia's hardware retains significant residual value across various customers and workloads, making it an attractive form of collateral.

Huang's remarks echo Elon Musk's recent claims that older AI accelerators can outperform newer hardware for inference workloads due to their superior performance per watt. Musk suggested that companies should assess AI hardware based on the amount of intelligence generated per watt of electricity, rather than solely focusing on raw processing power.

Huang and Musk are both pointing to a trend where Nvidia's A100 and H100 accelerators have retained more residual value than anticipated. The B200, in particular, has been rented or traded at prices equivalent to 158% of its original cost. However, the second-hand market for AI accelerators is influenced by several factors, including condition, availability, system configuration, and the expected workloads.