Nvidia targets USD 500 bn in third-party financing to fuel AI data center boom

Nvidia wants to graduate from supplying the AI boom to full-on financing it. The AI chipmaker inked MoUs with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to build standalone financing platforms designed to pull in more than USD 500 bn of third-party capital for AI data center buildout, it said in a press release. The move will see each of the six firms independently underwrite the compute instead of Nvidia putting up all the money directly.

What we know: None of the six agreements is final yet. Nvidia didn’t disclose how much each firm could commit, how much the credit would cost, or when any of it could start flowing. All it said was that the platforms would create “dedicated pools of capital at significant scale at attractive rates” for its customers.

Nvidia itself could have plenty of skin in the game. CEO Jensen Huang said the company could backstop as much as USD 125 bn of the financing, equivalent to a quarter of the USD 500 bn target. That means Nvidia could underwrite part of the financing being used to fund purchases of its own hardware.

The wager is that Nvidia’s chips can pay for themselves. Huang argues that its compute should be treated more like an income-generating asset than a piece of hardware that simply depreciates, because it can move across models, workloads, customers, and operators and stay current through Nvidia’s CUDA software.

If this works, Nvidia could be laying the groundwork for an entirely new corner of the credit market. Goldman’s David Solomon is already talking about creating a market for credit backed by Nvidia compute, potentially giving asset managers something new to lend against and trade. And where Nvidia goes, other chipmakers and hyperscalers could follow.

The flip side is concentration risk: A lot of credit could ultimately come to depend on the value of the same hardware, from the same supplier, and on AI demand continuing to hold up.

The scale of the bet lines up with what’s already happening upstream. Big Tech’s own AI spending is set to top USD 730 bn this year, Reuters reports. This is the backdrop making off-balance-sheet financing like this attractive to hyperscalers who’d rather not carry all that infrastructure spend directly.

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