The Money Behind the AI Boom.
The next phase of the AI boom may be as much about finance as technology, with Nvidia effectively helping to create a new financial market around computing power through partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR intended to raise more than $500 billion of third party capital for AI infrastructure.
Nvidia has the option to backstop as much as $125 billion itself, while combined AI spending by the major technology companies is expected to exceed $730 billion this year.
Financing the machines
The sums are becoming extraordinary, with Apollo and Blackstone separately financing a $35 billion expansion of Anthropic computing capacity using Broadcom technology.
Bank of America analysts estimate that Broadcom related chip financing could eventually support as much as $370 billion of senior debt by mid 2029, suggesting AI chips and computing capacity are rapidly becoming a significant new asset class for lenders and private capital.
Financial discipline arrives
There is also an important warning signal, with Nvidia reportedly reducing its proposed initial guarantee for an OpenAI data centre project in Ohio to below $120 billion from as much as $250 billion previously under discussion.
That does not suggest the AI investment cycle is ending, but it does suggest the people providing the money are beginning to ask harder questions about risk, returns and how much exposure they are prepared to carry.
What are the assets really worth
GPUs and computing capacity are increasingly being financed much like aircraft, property or industrial equipment, but there is one crucial difference in how quickly the underlying technology can become obsolete.
A chip considered indispensable today may have very different economics several years from now, making residual value, technological leadership and continuing demand increasingly important considerations for anyone lending against these assets.
Banking could be one of AI’s biggest winners
For banks and private capital, this could become one of the largest financial opportunities created by AI as hundreds of billions of dollars flow into data centres, power, networks and computing equipment.
The biggest winners may not be the institutions building the best AI models, but those that understand how to finance the infrastructure behind them while correctly pricing a new and unusually fast moving form of technology risk.