Nvidia's $500 Billion Compute Financing Push Stokes Depreciation Debate

Nvidia is pushing to transform its graphics processing units (GPUs) into an investable asset class, enlisting major financial players to fund AI data centers and 'AI factories'.

The company has signed memorandums of understanding with Apollo Global Management, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to deploy $500 billion in private capital. Nvidia CEO Jensen Huang claims that the chips are long-lived revenue-generating assets, citing the 2020-era A100 chip as still in active commercial use.

However, this contradicts a previous statement by Huang, who said Hopper chips would be worthless once Blackwell shipped. Critics also point out that Nvidia has offered residual value guarantees of up to 25 percent on some contracts, which could lead to circular financing risks.