Nvidia partners with money managers to create new asset class: Here's what to know

Summary

CNBC's Kristina Partsinevelos reports that Nvidia is partnering with six top asset managers including BlackRock, Goldman Sachs, and Blackstone to turn AI compute into a new asset class. The financing model treats GPU clusters as fungible collateral, with Nvidia backstopping up to 25% of residual value, which Wells Fargo calls 'depreciation insurance'. The report highlights Nvidia's claim of long chip economic life, Goldman's interest in creating a credit market, and the potential for future securitization. Skeptics question whether real demand justifies the spending.

• Nvidia partners with six asset managers to make AI compute an investable asset class.
• GPU clusters seen as fungible collateral, enabling asset-backed lending similar to mortgages.
• Nvidia provides a residual value backstop of up to 25%, acting as 'depreciation insurance'.
• Jensen Huang argues chips have an economic life of nearly a decade, supporting residual value.
• Goldman Sachs aims to create a credit market backed by Nvidia compute.
• Potential future risk if AI factory loans are repackaged and sold, adding leverage.
• Mizuho expresses skepticism about underlying real demand for AI spending.