Nvidia (NVDA) has secured $500 billion U.S. in financing from six private equity firms and investment banks as it looks to treat compute infrastructure like an asset to borrow against.
The chipmaker has signed deals with Apollo Global (APO), Blackstone (BX), BlackRock (BLK), Brookfield Asset Management (BN), Goldman Sachs (GS), and KKR (KKR).
The agreements establish financing for Nvidia’s customers so that they can purchase the company’s microchips and semiconductors.
Nvidia is mobilizing $500 billion U.S. in third-party capital for hyperscalers such as Microsoft (MSFT), frontier A.I. labs such as Anthropic, and enterprises to build out data centres.
The funding will be available to help the third parties acquire Nvidia’s chips and hardware, marking a shift in how artificial intelligence (A.I.) infrastructure is funded.
Essentially, Nvidia is helping its end users, or customers, secure the financing needed to buy its products without tapping their own balance sheets.
There has been concern on Wall Street over the amount of money companies such as Amazon (AMZN) and Alphabet (GOOGL) are spending on A.I. infrastructure such as data centres.
The billions being spent on A.I. has drained the free cash flow of the mega-cap technology companies and forced them to issue corporate bonds to raise needed capital.
Historically, Nvidia’s processors have been seen as a depreciating asset. Nvidia’s effort challenges that assumption, transforming A.I. compute capacity into bankable infrastructure.
The private equity firms and investment banks said in a joint news release that A.I. compute has evolved into a critical asset class that’s now driving global economic growth.
The arrangement orchestrated by Nvidia comes as demand for A.I. outstrips supply, said the Wall Street firms.
NVDA stock has risen 20% in the last 12 months to trade at $217.55 U.S. per share.
