Nvidia announced on August 10 that it has signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to establish financing platforms designed to mobilize more than $500 billion of third-party capital for AI compute infrastructure, according to the company's investor relations release.
The structure is meant to let hyperscalers, frontier AI labs and enterprises finance data centers and GPU purchases through long-term debt and asset-backed financing rather than paying cash up front. Under the arrangement, compute capacity itself serves as collateral, with special-purpose entities issuing bonds and private placements capable of raising tens of billions of dollars at a time.
Chips as Collateral
The conceptual leap is what Nvidia's chief executive emphasized in an interview with CNBC. "This is really the first time that technology chips have become an investable asset class," Jensen Huang said, describing the underlying assets as revenue-generating and adding that they are "productive, they're long-lived, they're fungible, they're flexible."
To make that case to lenders, Nvidia is putting its own balance sheet behind it. The company will guarantee up to 25% of the residual value of its chips at the end of a financing term, reviewed on a project-by-project basis. In practice, that covers a portion of the gap if a GPU's resale or redeployment value falls short of what underwriters assumed.
The Depreciation Argument
That guarantee sits at the center of the debate. The entire model depends on how long an AI accelerator holds economic value, and that assumption is contested.
Investor Michael Burry has called hyperscaler depreciation practices "one of the more common frauds of the modern era," arguing that a two-to-three-year upgrade cycle is difficult to reconcile with the five-to-seven-year useful-life assumptions used in financial statements. Burry has estimated depreciation could be understated by roughly $176 billion between 2026 and 2028.
Huang has pushed back on the characterization that financing customers who then buy Nvidia hardware amounts to a circular arrangement, noting that the company's share of the risk is deliberately smaller than what lenders typically absorb in comparable structures. Still, both the International Monetary Fund and the Bank for International Settlements have flagged AI circular financing as a systemic downside risk, and Nvidia's credit default swaps have drawn unusual attention on Wall Street in recent weeks, per Yahoo Finance.
Market Reaction
The initial response was skeptical. Nvidia shares fell roughly 1.4% after the announcement, erasing more than $70 billion in market value. By Tuesday morning the stock had recovered, rising about 1.5%.
Broader indexes were subdued. The Dow Jones Industrial Average edged up 0.2% in mid-morning trading Tuesday, the S&P 500 added 0.1% and the Nasdaq Composite gained 0.2%, following Monday's lower close, TheStreet reported. Oil moved sharply higher as hopes faded for a diplomatic agreement to reopen the Strait of Hormuz, and gold traded at $4,396.53 an ounce as of 9:00 a.m. ET, holding above $4,400 earlier in the session at a two-month high. Silver reached roughly $66, a seven-week high.
Attention now turns to Wednesday's July consumer price index. Economists surveyed by Dow Jones expect headline CPI to rise 0.1% on the month and 3.4% annually, with core inflation at 2.5%, down from 2.6% in June. A reading in line with forecasts would support the case for the Federal Reserve holding rates at its September 16 decision.
Sources: NVIDIA Investor Relations press release (August 10, 2026); CNBC; NBC News; Yahoo Finance; TheStreet; Morningstar