JPMorgan Chase & Co. and Goldman Sachs Group Inc. have taken an unusual step to reduce their exposure in a $5 billion loan sale for AI startup Volta Infrastructure Holdings Ltd. The move comes as investors seek higher yields for debt tied to the booming artificial intelligence sector.
The two banks are leading the loan offering for Volta, an AI cloud company. They have underwritten a $1.3 billion term loan, while a $3.7 billion portion of the loan is not underwritten by the banks. This strategy aims to shield them from potential risks, according to sources familiar with the deal.
The decision to limit exposure is rare and highlights the growing caution among financial institutions regarding high-risk investments in the AI sector. The $3.7 billion chip loan, in particular, is left unprotected, indicating the banks' efforts to mitigate their risk.