Nvidia gets $500bn from major banks to develop AI data centres
The money will be used to develop new data centres to house, operate, and cool miles of stacked computer chips that process AI data and actions.
Nvidia, led by CEO Jensen Huang, whose company's valuation has surged amidst the AI boom, has secured $500 billion (£370 billion) from prominent Wall Street banks to fund the development of artificial intelligence (AI) infrastructure.
The chip manufacturer announced agreements with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. These financial institutions are, for the first time, categorizing AI hardware and infrastructure, often termed "compute," as a distinct asset class.
Nvidia CEO Jensen Huang stated, "In AI, compute is revenue. We are bringing the world's leading long-term capital providers together to independently underwrite AI infrastructure."
The capital will be allocated to both Nvidia's internal initiatives and projects undertaken by its partners. This infrastructure funding will support the construction of new data centers designed to house, operate, and cool the extensive arrays of computer chips that process AI data and operations. It will also back new factories dedicated to manufacturing the AI chips essential for powering these systems.
Joe Bae and Scott Nuttall, co-chief executives of KKR, commented in a joint statement, "Compute has become a critical infrastructure asset. As we've scaled our approach to digital infrastructure, we've learned that delivery, not ambition, is the hard part."
Virtually every major technology and AI company relies on Nvidia's computer chips, or graphics processing units (GPUs), to power their services, AI platforms, and AI chatbots. Companies such as Google, Meta, Amazon, Microsoft, SpaceX, Tesla, OpenAI, and Anthropic utilize Nvidia's popular chips.
These companies have collectively invested over $1 trillion in AI projects and infrastructure in just three years, with further substantial spending anticipated. This demand for Nvidia's chips and services has propelled the company's stock market value to increase fivefold over the same period.
In a statement on Monday, Huang characterized Nvidia's role as a chip-maker as its origin. He added, "Today, we are helping create a new class of productive, investable infrastructure: AI factories."
With this new access to funding from its banking partners, Nvidia will enable these banks to finance a greater portion of the AI boom.
Jim Zelter, president of Apollo, a lender managing over $800 million in assets, remarked, "Modern compute has emerged as a scarce, mission-critical asset class." Zelter further noted that it is "positioned to drive significant long-term economic growth and productivity gains."
Last month, BlackRock independently partnered with Meta to finance and acquire a majority ownership stake in a data center in Texas. Similarly, Anthropic recently collaborated with Macquarie Asset Management and GIC, a Singaporean investment bank, for its own investment in AI infrastructure. While the company did not disclose the deal's size, it indicated that more financing is necessary due to the immense popularity of its chatbot, Claude, stating that "demand requires significant new compute."