Nvidia stock tanked around 2.5 percent on Monday following a report by the Financial Times that the chip giant is assembling a $500 billion AI financing plan with six Wall Street giants (Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and KKR) to fund AI data center construction.
The deal would rank among the largest infrastructure financing packages ever assembled. Separately, Nvidia is in talks to provide roughly $250 billion in financing guarantees for OpenAI’s proposed $500 billion data center project in Ohio.
The Wall Street AI financing machine
The financing brings together the full spectrum of institutional capital, from bulge-bracket investment banking to private credit arms that have become the largest lenders to artificial intelligence (AI) buildouts.
Hyperscalers and AI startups have increasingly turned to private credit and structured finance to fund data center construction, with firms such as Apollo and Blackstone emerging as the dominant lenders.
A $500 billion facility would fund thousands of megawatts of new data center capacity, the physical backbone for large language models and inference workloads that Nvidia’s Graphics Processing Units (GPUs) power.
The plan also takes the pressure off AI startups that are struggling to pay for their own computing power, handing that cost over to big investors looking for steady, long-term returns.
This AI financing plan mirrors the massive $500 billion AI project Nvidia and SK Group just kicked off. They are teaming up on everything from huge data centers to next-gen memory tech. On top of that, Nvidia is sending some of its top AI researchers over to South Korea to work with Korea Advanced Institute of Science and Technology (KAIST) on a project they’re calling “Korea AI.”
The OpenAI financing angle
To this point, Nvidia is not just working with Wall Street; the firm is also getting deeply involved in OpenAI’s massive $500 billion data center project in Ohio, which SoftBank’s Masayoshi Son is leading.
A financing guarantee from Nvidia would be unusual territory for a semiconductor company. Chipmakers traditionally sell components and move on: they don’t typically underwrite the construction of the facilities that house their products.
The $250 billion guarantee covers the data center lease and debt financing but would not cover the Nvidia chips inside the center.
The chipmaker is also discussing financing OpenAI’s chip purchases worth up to $350 billion, bringing Nvidia’s total financial exposure to OpenAI to roughly $600 billion.
The circular financing debate
So, here’s a bit of drama in all of this. The scale of Nvidia’s financial commitments has drawn sharp reactions. Investor Michael Burry wrote on social media that Nvidia would effectively be guaranteeing OpenAI’s own spending on Nvidia chips. Nvidia’s own filings show about $3.5 billion in guarantees; the figure being discussed for this project is $250 billion.
Some analysts are raising eyebrows over this ‘circular‘ nature of these deals, where Nvidia basically bankrolls the companies that end up buying its own chips; some worry this could artificially pump up demand. That said, others point out that helping customers pay for big-ticket tech is nothing new in capital-intensive industries; at this scale, it unusually concentrates risk.
