Nvidia announces $500 billion plan to finance AI data centers with GPU value guarantee

Nvidia announced an ambitious $500 billion financing plan to build AI data centers, with participation from Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. The company guaranteed with its own capital that GPUs used as collateral in these loans will retain value, covering up to 25% of any value decline if data center owners default and GPUs cannot command expected prices on the secondary market. The scheme aims to create an ecosystem of used AI hardware and maintain demand for Nvidia GPUs as they age, while sustaining the company's revenue stream. Despite the financial innovation, analysts note significant risks: if GPU demand weakens, Nvidia's obligations grow while revenues decline, creating potential risk comparable to historical scenarios like Lucent Technologies.