Investors question data center loan valuations after Nvidia financing

Nvidia just turned its GPUs into collateral. The company announced partnerships with six heavyweight financial institutions to funnel over $500 billion in third-party capital into AI data center projects, effectively asking Wall Street to treat compute hardware the way it treats real estate or aircraft. The partnerships bring together Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. Their collective mission: create pools of dedicated capital at attractive rates for clients building data centers and the power infrastructure to run them. The valuation problem Nvidia CEO Jensen Huang pitched the company’s compute technology as an “investable asset” that delivers cost savings and revenue potential. The framing is deliberate. Nvidia wants institutional capital to see its hardware not as depreciating equipment but as productive infrastructure with durable economic value. To sweeten the deal, Nvidia may offer case-by-case residual-value support of up to 25% for select financing projects. On certain deals, Nvidia is willing to backstop a quarter of the asset’s future value, giving lenders a cushion if the hardware becomes obsolete faster than expected. Scale that demands ...