Jensen Huang takes wheel of $500 bln AI bandwagon

Chipmaker Nvidia said on August 10 that it had signed memorandums of understanding with Apollo Global Management, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to help mobilize more than $500 billion to finance artificial intelligence infrastructure development.

It's an awkward situation for Huang. Hyperscalers are big consumers of Nvidia's silicon, and their credit ratings ultimately secure purchases by other server farmers, too. To help fill the gap, Nvidia will now steer buyers, including unrated AI labs like OpenAI and neoclouds such as CoreWeave CRWV.O, to blue-chip suppliers of capital. The partners, unveiled on Monday, are Apollo Global Management APO.N, BlackRock BLK.N, Blackstone BX.N, Brookfield, Goldman Sachs GS.N and KKR KKR.N.

Their loans will be customized, but secured by Nvidia’s products. This will extend beyond its ubiquitous graphics processors to other server-rack equipment. Depending on the project, the $5.3 trillion chipmaker may guarantee up to 25% of collateral based on residual value. Most of the funds would come from insurers, or credit and infrastructure investors; money managers foresee equity or hybrid elements, too.