--- title: "What if you can't afford chips? NVIDIA joins hands with Wall Street to turn AI computing power into financeable, securitized assets" type: "News" locale: "en" url: "https://longbridge.com/en/news/295608051.md" description: "NVIDIA has joined forces with Wall Street giants such as Apollo, BlackRock, and Blackstone to build a $500 billion securitized financing system for AI chips. By packaging GPUs into a new asset class resembling mortgage-backed loans through special purpose vehicles (SPVs), the initiative aims to open capital channels for small and medium-sized AI enterprises struggling with financing. However, the \"lettuce-like\" short shelf life of chips, controversies over circular financing triggered by NVIDIA's own backstop arrangements, and the reality of zero actual fundraising to date leave this financial innovation, compared to the MBS revolution of the 1970s, hanging on the razor's edge between idealism and risk" datetime: "2026-08-12T03:29:39.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295608051.md) - [en](https://longbridge.com/en/news/295608051.md) - [zh-HK](https://longbridge.com/zh-HK/news/295608051.md) --- # What if you can't afford chips? NVIDIA joins hands with Wall Street to turn AI computing power into financeable, securitized assets NVIDIA is partnering with Wall Street to transform AI chips into a new securitized asset class, attempting to unlock financing channels for small and medium-sized AI enterprises that cannot afford high-priced GPUs—but this arrangement has also sparked deep skepticism regarding collateral quality and circular financing. According to a Tuesday report by The Wall Street Journal, NVIDIA CEO Jensen Huang announced this week strategic partnerships with Apollo Global Management, BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs, and KKR, **with the goal of establishing a chip financing system sized at up to $500 billion.** The system will use NVIDIA AI hardware as underlying assets to issue public and private debt to institutional investors such as pension funds, insurance companies, and sovereign wealth funds. The raised funds will be injected into specialized platforms to provide financing support for AI companies' chip purchases or leases. Currently, no actual fundraising has been completed under the aforementioned cooperation framework. The market background for this arrangement is that **demand for AI computing power remains high, but financing costs are rising in tandem. Small and medium-sized AI enterprises are being squeezed by the bond supply of highly rated tech giants, becoming increasingly marginalized in the bond market.** BlackRock CEO Larry Fink compared the current historical node of AI computing power financing to the starting point of the mortgage-backed securities market in the 1970s. However, critics worry that using rapidly iterating chips as collateral carries inherent risks of rapid value depreciation, while NVIDIA's own partial backstop arrangements have made it difficult to dispel controversies over "circular financing." ## Financing Dilemma Forces Financial Innovation The core contradiction facing NVIDIA is that **its most valuable customer base—numerous small and medium-sized AI labs, cloud computing companies, and enterprise users—often cannot bear the direct procurement costs of high-priced chips, and the current high-interest-rate environment further exacerbates this dilemma.** Data from Bank of America Global Research shows that as of early August this year, AI-related bonds issued by large tech companies, data center projects, and chip financing instruments reached $344 billion, an increase of over $200 billion compared to the full year of 2024. However, this flood of supply mainly comes from tech giants with investment-grade ratings such as Meta, Alphabet, and Amazon, making it increasingly difficult for borrowers with weaker credit qualifications to gain a foothold in the bond market. AI cloud service provider CoreWeave completed a $2.6 billion loan financing this month at a yield more than 5.5 percentage points above the benchmark rate, i.e., over 9%, while its underwriters' initial pricing expectation was as much as 1.25 percentage points lower than the final transaction rate. Last month, Galaxy Digital issued $3.5 billion in junk bonds to build a data center in Texas leased to CoreWeave, with investors demanding yields close to 10%. These cases clearly present the financing pressure currently faced by AI borrowers with weak qualifications. ## Chip Securitization: The Logic of a New Asset Class The core mechanism of this cooperation is to securitize AI chip assets through special purpose vehicles (SPVs). The specific operating model is: **investors purchase debt from the SPV; the SPV uses the raised funds to purchase NVIDIA hardware and then leases the equipment to end customers; customers pay rent to the SPV, and the SPV repays principal and interest to investors.** Participants characterize this structure as a new asset class similar to aircraft, credit card, or mortgage securitization. Its core logic lies in the fact that **NVIDIA AI chips are in short supply; once a customer defaults, new customers will quickly fill the vacancy, thereby providing relatively stable cash flow guarantees for debt investors.** For debt investors who are optimistic about the overall prospects of the AI industry but do not wish to bear the risk of a single borrower, such tools hold certain appeal. Jensen Huang stated on platform X that NVIDIA may provide a backstop for up to 25% of project costs through a "residual value support mechanism" using its own balance sheet in some projects. This arrangement means that if end users default and the value of the underlying assets falls below an agreed lower limit, NVIDIA will bear the corresponding loss gap. For reference, competitor Broadcom provided similar support in the $35 billion chip lease financing arranged for Anthropic by Apollo, Blackstone, and a group of banks this June, with its maximum exposure disclosed at up to $29 billion. ## Controversies Over Collateral Quality and Circular Financing There are two core doubts in the market surrounding this new financing system. **The first is the value stability of chips as collateral.** Jack Ablin, founding partner of Cresset, a family office with $260 billion in assets under management, stated: "This is certainly good for NVIDIA; its customers need access to capital. But if you are a debt investor using computing power as collateral, historically, the shelf life of such assets is as short as lettuce." Huang countered that NVIDIA customers are still using previous-generation chips, indicating that hardware retains value for a long time after release. Executives involved in the agreement also emphasized in television interviews that NVIDIA chips are in extreme short supply, making them high-quality collateral, distinct from ordinary computer processors that depreciate rapidly. **The second is the concern over circular financing.** NVIDIA has previously been criticized for investing in companies that purchase its chips or guarantee their financing with its own balance sheet. Morgan Stanley analyst Joseph Moore wrote in a report on Tuesday that introducing third-party capital and credit decisions "should theoretically alleviate concerns about circular financing... but it does indeed polarize the debate further." Michael Burry, an investor who shorted mortgage-backed securities and recently bet on declines in AI stocks such as NVIDIA, stated bluntly on Substack: "Credit structuring is a natural part of the financial system. But in the late stages of a bull market, structuring unnatural credit to sustain momentum is where the real concern lies." Whether this financing system can truly materialize ultimately depends on the acceptance of debt investors. Currently, no actual fundraising has been completed under the aforementioned cooperation framework, and specific terms will largely be determined by market demand. Core questions underwriters need to answer include: How will the cash flow of underlying assets evolve if AI infrastructure construction slows down, or if projects are delayed or canceled? If NVIDIA's technological breakthroughs cause the value of older chips to shrink acceleratedly, is the collateral safety cushion sufficient? The answers to these questions will determine how much real capital flow this "financing pipeline" connecting AI computing power to global capital markets can actually deliver. ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [BX.US](https://longbridge.com/en/quote/BX.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [BLK.US](https://longbridge.com/en/quote/BLK.US.md) - [BXMT.US](https://longbridge.com/en/quote/BXMT.US.md) - [APO.US](https://longbridge.com/en/quote/APO.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [BAM.US](https://longbridge.com/en/quote/BAM.US.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [KKR.US](https://longbridge.com/en/quote/KKR.US.md) - [BAC.US](https://longbridge.com/en/quote/BAC.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [CRWV.US](https://longbridge.com/en/quote/CRWV.US.md) - [GLXY.US](https://longbridge.com/en/quote/GLXY.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) - [APO-A.US](https://longbridge.com/en/quote/APO-A.US.md) - [APOS.US](https://longbridge.com/en/quote/APOS.US.md) - [BTX.US](https://longbridge.com/en/quote/BTX.US.md) - [BIT.RT*.US](https://longbridge.com/en/quote/BIT.RT*.US.md) - [BDJ.US](https://longbridge.com/en/quote/BDJ.US.md) - [BSTZ.US](https://longbridge.com/en/quote/BSTZ.US.md) - [BIT.RT.US](https://longbridge.com/en/quote/BIT.RT.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) - [KKRS.US](https://longbridge.com/en/quote/KKRS.US.md) - [KKR-D.US](https://longbridge.com/en/quote/KKR-D.US.md) - [KKRT.US](https://longbridge.com/en/quote/KKRT.US.md) - [BAC-Q.US](https://longbridge.com/en/quote/BAC-Q.US.md) - [BML-L.US](https://longbridge.com/en/quote/BML-L.US.md) - [BAC-L.US](https://longbridge.com/en/quote/BAC-L.US.md) - [BAC-K.US](https://longbridge.com/en/quote/BAC-K.US.md) - [BML-H.US](https://longbridge.com/en/quote/BML-H.US.md) - [BAC-N.US](https://longbridge.com/en/quote/BAC-N.US.md) - [BAC-E.US](https://longbridge.com/en/quote/BAC-E.US.md) - [MER-K.US](https://longbridge.com/en/quote/MER-K.US.md) - [BAC-O.US](https://longbridge.com/en/quote/BAC-O.US.md) - [BML-G.US](https://longbridge.com/en/quote/BML-G.US.md) - [BAC-M.US](https://longbridge.com/en/quote/BAC-M.US.md) - [BAC-B.US](https://longbridge.com/en/quote/BAC-B.US.md) - [BML-J.US](https://longbridge.com/en/quote/BML-J.US.md) - [BAC-S.US](https://longbridge.com/en/quote/BAC-S.US.md) - [BAC-P.US](https://longbridge.com/en/quote/BAC-P.US.md) - [8648.JP](https://longbridge.com/en/quote/8648.JP.md) - [BRPHF.US](https://longbridge.com/en/quote/BRPHF.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [Nvidia just recruited Wall Street to help fund $500 billion in AI infrastructure. Here’s the catch.](https://longbridge.com/en/news/295590827.md) - [Jensen Huang's latest pitch to investors: Nvidia's AI compute is its own asset class](https://longbridge.com/en/news/295562673.md) - [Nvidia’s Best Customers Have a Reason to Stop Buying So Many Nvidia Chips](https://longbridge.com/en/news/295572288.md) - [Firmus nearly doubles valuation to over $10.5 billion in 4 months with Nvidia-backed fundraise](https://longbridge.com/en/news/295169706.md) - [Nvidia AI Chips Are Now an Asset Class. BlackRock CEO Larry Fink Just Compared Them to Mortgage-Backed Securities.](https://longbridge.com/en/news/295552067.md)