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Tech giant Nvidia has announced a major financial initiative to address the global shortage of computing power and data centres amid the unprecedented expansion of artificial intelligence (AI).
The company has announced plans to launch a special financing platform with more than $500 billion in capital through partnerships with six major global financial institutions.
Nvidia has signed memorandums of understanding with six leading Wall Street investment firms—Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.
Under the new framework, the investment firms will create dedicated capital pools to finance purchases of Nvidia infrastructure.
This will allow frontier AI labs, enterprises, government agencies and cloud service providers to finance the Nvidia chips and infrastructure they need at relatively lower interest rates and on more manageable terms.
Nvidia CEO Jensen Huang said the company itself has the capacity to provide a backstop for up to 25% of the initiative, equivalent to around $125 billion, to support its successful implementation.
According to Huang, chips and GPU technology have now moved beyond the traditional boundaries of semiconductors to become long-term, revenue-generating assets.
Just like electricity and the internet, AI computing has become a fundamental form of infrastructure. He said the initiative would accelerate the development of a new generation of “AI factories” around the world to meet the demands of future industries.
Global AI budgets among major technology companies are expected to exceed $730 billion this year. However, given the enormous capital requirements of AI infrastructure, bringing in private-equity firms and institutional investors beyond government banks and capital markets could permanently reshape the global chip market. Although the agreements have been reached, the release of capital will begin gradually, subject to final approval of the deals.