Jensen Huang takes wheel of $500 bln AI bandwagon

Apollo Global Management

12/08/2026 13:00

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
By Jonathan  Guilford and Karen Kwok
NEW YORK, August 11 (Reuters Breakingviews) - Nvidia NVDA.O boss Jensen Huang is like a car salesman hawking a popular model. He sees eager customers for computing power, but knows that fewer of them can afford it. The solution: assemble deep pockets from across Wall Street to pony up some $500 billion of funding for buyers. It's a crafty deal that also conspicuously reflects concerns about the ever-growing cost of artificial intelligence.
Prime data-center builders are approaching their financial limits. Alphabet GOOGL.O, Amazon.com AMZN.O, Meta Platforms META.O, Microsoft MSFT.O and Oracle ORCL.N will spend roughly $750 billion this year, equal to 38% of revenue, S&P Global Ratings projects. Some of them are already burning cash.
New spending promises are also making shareholders twitchy. Debt issued by tech goliaths keeps getting pricier. The cost of insuring against its default is rising.
It's an awkward situation for Huang. Hyperscalers are big consumers of Nvidia's silicon, and their credit ratings ultimately secure purchases by other server farmers, too. To help fill the gap, Nvidia will now steer buyers, including unrated AI labs like OpenAI and neoclouds such as CoreWeave CRWV.O, to blue-chip suppliers of capital. The partners, unveiled on Monday, are Apollo Global Management APO.N, BlackRock BLK.N, Blackstone BX.N, Brookfield, Goldman Sachs GS.N and KKR KKR.N.
Their loans will be customized, but secured by Nvidia’s products. This will extend beyond its ubiquitous graphics processors to other server-rack equipment. Depending on the project, the $5.3 trillion chipmaker may guarantee up to 25% of collateral based on residual value. Most of the funds would come from insurers, or credit and infrastructure investors; money managers foresee equity or hybrid elements, too.
The entire plan hinges on Nvidia products retaining their widespread acceptance as the industry standard, with value sufficiently understood to be safely financed and even resold if a customer defaults. In a sense, it channels the $130 billion market for securitized car loans. Vehicles can be repossessed easily, after all, and flogged to other drivers.
Huang’s backstop also hints at growing worries, however. Although the headline figure is aspirational, with blanks to fill in on the memorandums of understanding, it looks like he's trying to expand the market. Just as auto loans are available to customers with weaker credit scores, the same may now be true for buyers of data-center equipment who want to borrow. The arrangement will become increasingly problematic if credible rivals come along or the expected payoffs from AI ebb. For Nvidia, the challenge will be ensuring that its chips remain as reliable as a Ford pickup.
     
CONTEXT NEWS
Chipmaker Nvidia said on August 10 that it had signed memorandums of understanding with Apollo Global Management, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to help mobilize more than $500 billion to finance artificial intelligence infrastructure development.

(Editing by Jeffrey Goldfarb; Production by Pranav Kiran)
((For previous columns by the authors, Reuters customers can click on GUILFORD/ Jonathan.Guilford@thomsonreuters.com, KWOK/ karen.kwok@thomsonreuters.com))