Nvidia Aims to Raise «At Least 500 Billion Dollar»
The chipmaker has unveiled a high-profile consortium to finance AI infrastructure. According to Nvidia CEO Jensen Huang, «computing capacity is becoming an asset class of its own.»
Nvidia announced a deal on Monday evening involving Apollo, Blackstone, Blackrock, Brookfield, Goldman Sachs and KKR, among others. The firms are expected to raise «at least 500 billion dollar» in long-term financing from their clients to fund the expansion of AI infrastructure.
Nvidia CEO Jensen Huang sees the initiative as an important next step in the build-out of artificial intelligence. «Computing capacity is becoming an asset class of its own,» Huang told CNBC, adding that chips themselves are «an investable asset.»
Huang was joined in the television studio by senior executives from some of the world's largest financial groups. Blackrock CEO Larry Fink described the expansion of AI infrastructure as «an enormous economic opportunity.»
According to Fink, the United States will require an additional 70 gigawatts of power. Building one gigawatt of data center capacity costs between 50 billion and 60 billion dollar.
An Enthusiastic Larry Fink
«This is going to be an enormous financial opportunity and create a large number of new jobs,» Fink said. «We need to raise the money as quickly as possible,» the BlackRock CEO stressed, arguing that this was also necessary to safeguard the United States' leading position in the global AI race. Overall, trillions in new capital will be required.
Goldman Sachs CEO David Solomon, meanwhile, emphasized his confidence in Nvidia. «We strongly believe in the continued development and the opportunities associated with it,» he said.
Nervousness in the Stock Market
In recent months, investors have repeatedly expressed concerns that technology companies and their financial backers may be pushing AI investment too far. As recently as July, technology and semiconductor stocks suffered a correction, partly as competition from China proved unexpectedly strong.
Huang stressed that the financing would not come from Nvidia itself, but from external investors. The consortium intends to create «dedicated pools of capital at significant scale and on attractive terms for Nvidia's customers,» according to the official announcement. The aim is to make it easier for Nvidia customers to gain large-scale access to scarce computing capacity.
A Web of Financial Relationships
Nvidia has already struck deals worth hundreds of billions of dollar with companies across the AI industry. This has fueled suspicions among some investors that the chipmaker could be artificially boosting demand and valuations across the sector.
In July, Nvidia expanded its partnership with South Korean conglomerate SK Group. The companies said they expected to conduct more than 500 billion dollar worth of business with each other in the future.
Nvidia has also been in talks to back as much as 250 billion dollar to help OpenAI secure computing capacity for a US data center project. Such an agreement would rank among the chipmaker's largest financing arrangements involving a customer.
