Nvidia secures up to $500 billion in financing and backs used-GPU collateral

Nvidia disclosed that investment firms including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR have pledged up to $500 billion to finance the construction of AI data centers. The announcement also outlined a new program in which Nvidia will use its own funds to guarantee that graphics processing units (GPUs) pledged as collateral retain a minimum resale value.

Under the scheme, if a borrower defaults and the GPUs cannot be sold for the book-value assumed in the loan, Nvidia will cover up to 25% of the difference. The company said the arrangement is intended to create a secondary market for older GPUs and sustain demand for its hardware over time.

“Is this circular financing? This initiative is designed to address that concern. We are bringing independent, long-term institutional capital into the AI infrastructure market,” Nvidia CEO Jensen Huang wrote on X.

“When needs change, the factory can be used by another customer, another cloud or another operator. This broad ecosystem gives NVIDIA compute a deep market of potential users and off-takers, helping protect residual value,” Huang added.

Analysts note that the guarantee creates a “wrong-way” risk, whereby Nvidia’s obligations increase if demand for its chips weakens. The company, however, argues that the program shifts most capital and risk to the participating investors while providing a safety net for used-GPU values.

The financing approach comes as traditional sources of funding for AI infrastructure, such as corporate debt and equity issuances, have become more constrained. Nvidia’s move aims to broaden the pool of capital available for AI projects and to promote a longer-term view of AI hardware as durable infrastructure rather than rapidly depreciating equipment.