Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) is partnering with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to build financing platforms aimed at mobilizing more than $500 billion in third-party capital for AI infrastructure.
The agreements, structured as memorandums of understanding, are designed to let outside investors fund the buildout of data centers, power and other AI infrastructure without adding directly to Nvidia's balance sheet.
Under the arrangements, the six financial institutions would help channel capital to independent platforms building AI infrastructure based on Nvidia hardware, rather than Nvidia financing the projects itself.
Shares of Nvidia were up around 1% on Tuesday.
Analysts at BofA called the move a positive first step, noting it shifts the funding burden onto the consortium rather than Nvidia's own balance sheet and marks a pivot away from vendor-financing arrangements.
“For $500 billion of capital to treat compute as an "investable asset class," residual value must hold - and that is exactly what NVDA supplies,” analysts wrote.
“Compute that is fungible and transferable across operators, with CUDA continuously extending useful life, keeps resell/rental rates high and depreciation curves benign. NVDA guarantees asset quality, not the debt - turning the bear's depreciation worry into the enabling feature.”
Wedbush analysts described the financing pool as another mechanism likely to reinforce Nvidia's position.
“We see this fund as another mechanism that likely supports NVDA's leadership and growth away from hyperscalers (with NVDA having characterized this demand as comprising around 50% of its revenue),” Wedbush wrote.
“As such, while we would appreciate incremental details around the exact structure of this new financing vehicle, at first glance we see the news as another positive driver for NVDA sales and earnings momentum.”
