Nvidia Seeks Insurance to Expand AI Chip Financing

Nvidia Corp has entered early-stage discussions with insurance companies to shift the financing risks associated with its AI chips. The initiative seeks to expand chip demand beyond major technology firms by facilitating loans to smaller neocloud companies. Under the proposed structures, insurance would protect lenders if borrowers default and the chips pledged as collateral cannot be resold for the full value of the debt.

CEO Jensen Huang advocates for treating chips as an "investable asset class" similar to other long-lived technology assets. To support this, Nvidia has shared data on chip depreciation and future computing power value with at least one insurer and is collaborating with broker Howden Re on potential risk-sharing structures. The company is also exploring the possibility of syndicating risk to hedge funds and alternative investors or joining consortia with asset managers.

This effort follows a previous offer by Nvidia to backstop financing deals intended to unlock $500 billion in capital from firms including Goldman Sachs and Apollo Global Management.