Nvidia's $500 Billion Plan Hits Roadblocks Over GPU Lifespan

Nvidia Corp., (NVDA) is pushing for its graphics processing units (GPUs) to be treated as long-lived infrastructure assets, worth up to $500 billion in financing. The company claims that these chips can last up to ten years, but lenders are skeptical and want stronger protections before making loans against them.

The issue lies in the depreciation schedules used by banks, which typically range from three to four years. This disparity could lead to borrowers facing higher interest rates or more stringent financial requirements if lenders assign lower long-term values to Nvidia's GPUs.

Nvidia's plan aims to increase institutional funding for AI infrastructure, but it faces resistance from banks and credit investors who prefer more robust guarantees. The demand for financing in the AI sector remains high, with transactions worth tens of billions of dollars reportedly underway.