Nvidia CEO Jensen Huang unveiled a plan for Wall Street firms, not tech balance sheets, to fund the next stage of the AI buildout. Goldman Sachs, BlackRock, Blackstone, KKR, Apollo and Brookfield say they're willing to raise $500 billion for AI infrastructure, treating data-center hardware as a new asset class investors can buy into.
Jensen Huang appeared on CNBC Monday alongside six Wall Street firms to describe his plan for financing artificial intelligence infrastructure. Together, the six firms said they're willing to raise $500 billion, and potentially more, for the construction of new AI factories.
The pitch treats AI hardware differently than a laptop or phone. Huang told CNBC's Becky Quick the equipment functions as revenue-generating assets that are productive, long-lived and fungible, enough to attract institutional capital instead of relying solely on the tech giants' own balance sheets.
A shift from corporate debt to third-party capital
Their joint press release said the companies had signed memos of understanding, with no reference to signed contracts yet, and the panel left rates, borrower types and timelines unspecified. The announcement follows a partnership Nvidia announced nearly 11 months ago to invest up to $100 billion in OpenAI, a plan that never materialized. Nvidia still contributed $30 billion to the funding round OpenAI closed earlier this year.
Money has so far come largely from the hyperscalers themselves. Alphabet, Amazon, Meta, Microsoft and Oracle have raised well over $150 billion combined this year selling debt and equity to build data centers. Intel, separately, upsized its stock offering to $20 billion. Wall Street's entry would let AI infrastructure use borrowed capital, or leverage, rather than draw further on those firms' own cash.
Comparisons to mortgage securitization
KKR's Waldemar Szlezak described the model in market terms: firms can treat the buildout as a revenue stream and divide the risk among investors. Goldman Sachs CEO David Solomon called the equipment real assets with real value. BlackRock's Larry Fink separately likened the moment to the early mortgage-backed securities market he entered in the 1970s.
The comparison invites scrutiny. Short-seller Michael Burry suggested late last year that several tech giants were overstating the useful life of their AI chips and understating depreciation. Apollo's Jim Zelter acknowledged the risk directly: "There will be excesses, there will be pullbacks."
Nvidia said it will have the option of backstopping 25% of every loan, a structure that should result in more favorable interest rates for borrowers than relying on their own credit rating. Borrowers must also use Nvidia-specified system architectures that allow another company to take over operations if needed.
Source: CNBC
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