AI chip financing hits a wall
After rushing to lend money for the data-center buildout, now some investors can’t dump it fast enough, including whole portfolios of loans that are being shopped at steep discounts.
The AI financing sector is experiencing a significant downturn. After a surge in lending for data-center development, some investors are having difficulty offloading their investments. Portfolios of loans are now being offered at considerable discounts, with GPU financings particularly impacted by concerns that the loans' lifespans may exceed the technology's utility, reported by Semaform.
On Friday, Bloomberg disclosed that Dutch bank ING was considering offloading $500 million of data-center loans, including a $25 million allocation for the Stargate project backed by OpenAI, SoftBank, and Oracle. The upcoming challenge for Wall Street will be determining if Goldman Sachs and Apollo can entice enough investors to participate in a $40 billion chip financing deal for SpaceX, the largest of its kind, which they have been marketing.
Ares Management CEO Michael Arougheti, speaking on a recent earnings call, expressed that the firm would be excluding such deals, stating, "I, for one, personally do not know how to underwrite the decline and depreciation curves on that type of technology."
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
