Nvidia’s AI financing plans face questions over chip collateral

Reuters reported that Nvidia’s $500 billion financing plan relies on chip-backed loans.[2] Nvidia separately announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to establish compute-financing platforms intended to mobilize more than $500 billion in third-party capital.[3] Nvidia said those partnerships remain subject to execution of final agreements.[3] The figures describe distinct arrangements in the evidence: one is Reuters’ account of a financing plan, while the other is Nvidia’s stated goal for capital mobilized through its partnerships.[2][3]

Bankers and asset managers told Reuters they doubt Nvidia’s chips can serve as long-term collateral, and some lenders want higher guarantees than Nvidia originally outlined.[2] Reuters sources said deals in the pipeline likely offer investors more certainty, including stronger guarantees.[2] Nvidia said its AI compute is a productive, durable and fungible asset that can support long-term financing.[2] The company also said its financing partners independently assess customer commitments, expected cash flow and residual value, and that structures will vary as the market develops.[2]

Reuters Breakingviews described CoreWeave as an under-pressure data-center operator that Nvidia has helped support as a buyer of its chips.[1] Nvidia announced a $2 billion investment in CoreWeave Class A common stock at $87.20 per share.[4] CoreWeave said the companies planned to use Nvidia’s financial strength to speed its procurement of land, power and shell for AI factories.[4] Nvidia said the buildout of more than five gigawatts of AI factories could be accelerated by 2030.[4]

Reuters Breakingviews said a freeze in credit markets could force Nvidia’s hand, and described the company as worth $5.3 trillion.[1] Jensen Huang has said the so-called neocloud is strong enough to stand on its own.[1] Bloomberg reported that Huang defended CoreWeave’s financial health after concerns about its debt triggered a major selloff in its shares and bonds; he told Bloomberg he was optimistic about the company.[5] The Wall Street Journal reported that CoreWeave shares had lost about a third of their value in the past month, while bond yields had risen well into double digits.[6] Nvidia has not said it will rescue CoreWeave.[6]