Nvidia secures up to $500B in financing commitments for AI data centers with chip-value guarantees

Nvidia announced that Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR committed up to $500B to finance AI data center construction. The arrangement includes Nvidia guaranteeing up to 25% of the difference if GPUs used as loan collateral lose value during liquidation.

The plan is designed to create a secondary market for used AI hardware, helping sustain demand for Nvidia’s GPUs as they age. Nvidia CEO Jensen Huang described AI infrastructure as long-term 'investable infrastructure,' comparing it to railroads or airlines rather than depreciating assets like PCs.

Analysts note the scheme introduces 'wrong way' risk for Nvidia, where the company’s obligations increase if demand for AI infrastructure weakens, potentially squeezing revenues. Huang countered comparisons to Lucent Technologies’ dotcom-era lending practices, emphasizing that the bulk of capital and risk is borne by institutional investors.

The financing push follows reports of Nvidia pursuing an additional $750B in similar circular deals this summer, signaling an aggressive strategy to fund AI buildouts amid signs that traditional funding methods are under strain.