Nvidia has teamed up with some of Wall Street's largest banks to help raise $500bn (£370bn) in capital to develop artificial intelligence (AI) infrastructure, according to BBC Business. The chipmaker said it had struck deals with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR, and that the banks were for the first time treating AI hardware and infrastructure, often referred to as "compute", as a separate asset class.
The $500bn capital raise
The financing will go towards Nvidia's own projects and those being built by its partners, BBC Business reported. Specifically, the fund will support:
- Construction of new data centres to house, operate, and cool miles of stacked computer chips that process AI data and actions.
- New factories to manufacture the AI chips needed to power these systems.
With a new ability to tap funding from the banks partnering with Nvidia, such banks will be able to finance more of the AI boom, the BBC reported.
What Nvidia and partners say
In AI, compute is revenue. We are bringing the world's leading long-term capital providers together to independently underwrite AI infrastructure.
— Jensen Huang, chief executive of Nvidia, as reported by BBC Business.
In a statement on Monday, Huang referred to Nvidia's role as a chip-maker as the company's beginning. "Today, we are helping create a new class of productive, investable infrastructure: AI factories," he said.
Joe Bae and Scott Nuttall, co-chief executives of KKR, said 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."
Jim Zelter, president of Apollo, a lender which manages more than $800m in assets, said: "Modern compute has emerged as a scarce, mission-critical asset class." It is also "positioned to drive significant long-term economic growth and productivity gains", Zelter added.
Market context and demand
Essentially every major technology and AI company uses Nvidia's computer chips, or graphics processing units (GPUs), to power their services, AI platforms and AI chatbots, according to BBC Business. Companies using Nvidia's chips include:
- Meta
- Amazon
- Microsoft
- SpaceX
- Tesla
- OpenAI
- Anthropic
Such companies have collectively spent over $1tn in just three years on AI projects and infrastructure, with much more spending expected. Their demand for Nvidia's chips and services has driven the stock market value of the company up fivefold in three years.
| Key metric | Figure |
|---|---|
| Capital raise | $500bn (£370bn) |
| Partner banks | Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, KKR |
| Collective AI spending by major companies (3 years) | Over $1tn |
| Nvidia market value growth (3 years) | Fivefold |
Related deals and ongoing investments
BBC Business also reported that BlackRock last month entered into an individual deal with Meta to finance and take a majority ownership stake in one data centre in Texas. Anthropic recently entered into a deal with Macquarie Asset Management and GIC, an investment bank in Singapore, for its own investment in AI infrastructure. The company did not specify the size of the deal, but said more financing was needed as its popular chatbot Claude had become so popular that the "demand requires significant new compute".
Sources:
