Wall Street giants partner with Nvidia on $500bn AI financing deal

The world’s largest financial groups are working with Nvidia to assemble a $500bn funding package for AI infrastructure development, in one of Wall Street’s most ambitious lending efforts to date.

A consortium of groups including Apollo Global, Blackstone, BlackRock, Brookfield Asset Management, Goldman Sachs and KKR is entering a partnership with Nvidia to invest in the AI build-out, six people briefed on the talks told the FT.

The deal could be announced as soon as Monday, the people said. Shares in the chipmaker fell about 1.4 per cent after the FT reported on the arrangement, erasing more than $70bn in market capitalisation.

The partnership underscores Nvidia’s growing efforts to raise capital for itself and its clients to continue assembling the chips, power production and data centres at the heart of the AI boom.

The $5.25tn company has positioned itself at the centre of the AI boom, providing chips, infrastructure and software to a wide array of partners developing the technology. Nvidia’s graphics processing units, or GPUs, underpin most of the leading US AI models available today.

The chipmaker often provides financial backing to help its AI partners raise debt in capital markets, which helps boost Nvidia’s own revenue. However, the circular nature of such transactions has raised concerns about concentrated risks in the sector.

Separately, Nvidia was in talks to provide a massive guarantee for a 10-gigawatt data centre project in Ohio leased to OpenAI, according to a person familiar with the matter.

It also shows how Nvidia is building relationships with the giants of the private capital industry, which are collectively preparing to invest trillions of dollars of their insurance, retail and institutional investor assets into AI infrastructure.

In recent years, private capital groups such as Apollo and Blackstone have structured AI infrastructure deals to assist companies like Anthropic finance their heavy spending on chips and data centres.

Apollo, Blackstone, Brookfield, BlackRock, Goldman and KKR did not immediately respond to requests for comment. Neither did Nvidia respond to requests for comment.

Nvidia has been the biggest beneficiary of an explosion of interest in AI, which has seen demand for the group’s newest hardware vastly outpace supply. Chips account for the bulk of the cost of new computing capacity.

The company’s market capitalisation has increased 15-fold since the end of 2022, shortly after the release of OpenAI’s ChatGPT.

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The biggest cloud-computing companies, including Meta, Oracle, Microsoft, Alphabet and Amazon, have dramatically increased their spending on AI infrastructure as they look to win the race to dominate the emerging technology. Morgan Stanley projects so-called hyperscalers will spend $3.5tn between 2026 and 2028.

That need for capital has forced technology groups to tap every source of cash they can find, including public equity, investment-grade and high-yield bonds, securitised debt, private credit and project finance markets.

“[The] sheer size of the AI infrastructure build-out is unprecedented,” Jim Zelter, president of Apollo, said on an earnings call earlier this month. “More than $8tn of capital is expected to be invested, a staggering sum. We see an enormous opportunity for private capital to finance a portion of this along with public capital.”