Nvidia Partners With Wall Street to Raise $500 Billion

Nvidia Corp. has partnered with six major Wall Street firms—Apollo Global Management, BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs, and KKR—to mobilize over $500 billion in third-party capital for AI infrastructure. The initiative, conceived by CEO Jensen Huang, aims to provide loans and credit to AI labs and startups to build data centers and AI factories. By using compute power as collateral, the consortium intends to treat AI infrastructure as a productive, investable asset class similar to real estate or power plants.

Nvidia will act as a matchmaker between its customers and the lenders. To mitigate risk, the financing will be handled by third parties and will not sit on Nvidia's balance sheet. Following initial market concern that the plan might increase Nvidia's credit risk, Jensen Huang clarified that the company's support would be limited to a residual-value backstop of up to 25% of an opportunity, assessed on a project-by-project basis. This clarification led bond traders to reduce credit risk measures for the company on Tuesday.

While BlackRock CEO Larry Fink compared the effort to the emergence of mortgage-backed securities, some analysts warn the strategy could create a credit bubble or lead to overbuilding if AI monetization fails to keep pace with spending. In separate industry developments, Intel Corp. upsized a public share offering to $20 billion to fund AI demand, and OpenAI is developing a smart speaker in collaboration with LoveFrom, amid an intellectual property lawsuit filed by Apple Inc.