Nvidia: AI becomes a financial asset. Partnership with global financial giants

So far, these investments have been funded mainly by the budgets of large technology companies. Microsoft, Amazon, Alphabet and Meta are spending hundreds of billions to increase their computing capacity. But the growth of AI is driving capital requirements to such levels that a second source of funding is becoming necessary.

This is where Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR come into the picture. The agreement does not, at least according to the information made public, provide for the creation of a single 500 billion fund. Instead, the various financial operators are expected to develop independent platforms through which to structure and finance individual projects.

A ten-billion-dollar project, for example, could be structured within a special-purpose vehicle. Part of the capital could be provided by pension funds and insurance companies through funds managed by one of Nvidia’s partners. Another part could come in the form of debt from banks, private credit funds or bond investors.

In this way, some of the money that currently goes towards pension funds, insurance companies and infrastructure funds could be channelled into data centres, energy and computing systems for artificial intelligence.

For Nvidia, the advantage is clear. The more capital available to build AI infrastructure, the greater the potential for its customers to purchase GPUs, networking equipment and other systems from the group. But the model also allows companies using the computing power to avoid necessarily bearing the full initial cost of the infrastructure on their own balance sheets. Part of the financial risk can be transferred to the investors funding the project.

It is also the most sensitive aspect of the operation. A power station can have an economic lifespan of several decades. The processors used for artificial intelligence, on the other hand, become technologically obsolete much more quickly.