Goldman Sachs Group Inc., Blackstone Inc. and Apollo Global Management Inc. had been working tirelessly for months to draw up debt deals that would help developers of artificial intelligence systems pay for chips from Nvidia Corp.
With slow progress on the complex deals, Nvidia’s chief executive officer, Jensen Huang, decided to change tack: He went public this week with the effort, saying the group is aiming to collectively finance AI computing deals totaling $500 billion — a round figure with no obvious provenance.
In doing so, he was seeking to assure Nvidia’s investors that there are plenty of deep-pocketed firms ready to finance his clients, particularly AI startups such as Anthropic PBC and OpenAI that are key to Nvidia’s future demand. While he’s bullish on AI spending overall, his company has been seeking to broaden its customer base beyond hyperscalers including Microsoft Corp. and Amazon.com Inc., many of which are trying to create their own components.
Huang wanted something else, too. After months of working with the trio of financiers, his $5.5 trillion firm called the original group up just days before the announcement to say that three other lenders — KKR & Co., BlackRock Inc. and Brookfield — were joining the pack and committing to financing a chunk of the debt.
With the partnership out in the open, some of the largest firms on Wall Street are standing by to arrange hundreds of billions of dollars in financing for chip deals, while Nvidia itself will backstop a portion of those deals with guarantees. No deals were signed by the time of the announcement, which was left deliberately vague, according to people familiar with the matter who asked not to be identified discussing private talks.
Investors have been concerned that Santa Clara, California-based Nvidia, whose chips are crucial in many of the data centers powering the global AI surge, and other companies have been stoking a bubble in the industry through circular financing. That’s been fueled by deals where Nvidia has invested in some of its clients such as CoreWeave Inc.
Initially, the financing venture’s framing unnerved debt investors, concerned about how exposed it left the chipmaker to more leverage. But that eased as Huang clarified that Nvidia’s support would be for as much as 25% of an opportunity and the firm would assess each project on a case-by-case basis.
