Nvidia is guaranteeing $500B in debt — and risking it all to keep GPUs valuable
nvidia is guaranteeing up to $500b in financing for ai data centers and backing the resale value of its gpus to secure the capital. this creates a secondary market for aging chips, shifting depreciation risk from data center owners to nvidia.
nvidia announced a plan with apollo, blackrock, and other firms to invest up to $500b in ai data centers, distinctively offering to guarantee the resale value of its own chips to facilitate these loans. by promising to cover 25% of the gap if depreciated gpus cannot cover their book value during liquidation, nvidia is effectively creating a secondary market for aging hardware to sustain demand. this strategy, while reducing risk for borrowers and introducing independent capital, exposes nvidia to significant downside risk if the ai boom slows and chip values plummet. ceo jensen huang is positioning ai servers as long-term infrastructure like railroads rather than depreciating assets like pcs to justify this financial engineering.