Nvidia Partners with Insurers to Spread Risk of AI Build-Out
Nvidia is exploring ways to spread the risk of its AI build-out by partnering with insurance companies. The chipmaker has held talks with insurers about various structures that could shift some of the risk of capital-intensive semiconductor financing to insurers and other investors.
One idea under discussion involves insurance against losses on loans to upstart cloud computing companies, or 'neoclouds', if they default and the Nvidia chips pledged against their debt cannot be resold for enough to repay lenders.
Nvidia's CEO Jensen Huang has said that chips should be treated like an 'investable asset class' akin to other pieces of expensive, long-lasting technology, such as aeroplanes. He wants to unlock more demand for Nvidia's semiconductors beyond Big Tech groups.
The insurance discussions represent a new front in Nvidia's efforts to expand the range of customers who can buy its chips. The company has also explored using insurance groups to syndicate risk to hedge funds and other alternative investors.