Top Wall Street financiers leveraged state-of-the-art Nvidia GPUs to create massive bond markets. According to the FT report, companies have given billions of dollars in loans to companies using Nvidia chips as collateral. The risk is that new GPU technology is released regularly and existing collateral may lose value.
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Top Wall Street firms have loaned billions of dollars to a handful of tech companies using Nvidia’s artificial intelligence-enabled GPUs as collateral, the Financial Times reported.
According to the FT, major financial institutions such as BlackRock, Blackstone, Pimco and Carlyle have provided more than $11 billion in loans to “neocloud” companies, tech companies that provide cloud services to other tech companies developing AI products. I’m going.
These companies are among Nvidia’s biggest customers and include names like CoreWeave, Crusoe, and Lambda Labs. In total, they purchased tens of thousands of popular Nvidia chips and offered them as collateral for loans used to buy more GPUs, according to the report.
However, there are concerns about the value of Nvidia’s GPUs, as the price of existing AI chips may fall as more advanced models are released and companies may scale back their AI spending.
Having access to a GPU is no longer like getting a “golden ticket to Willy Wonka’s factory” as was thought a year ago, said an executive at one of CoreWeave’s lenders. told FT.
Meanwhile, the lease agreement between the neocloud company and the technology group is set to expire in the next few years. As a result, a large number of chips could return to the market, the report added.
CoreWeave, Crusoe, and Lambda Labs did not immediately respond to Business Insider’s requests for comment. Nvidia declined to comment.
Elsewhere on Wall Street, growing doubts about the return on AI investments by companies and the threat of competition from other chipmakers entering the AI space are raising concerns that Nvidia’s breakneck pace of growth may not be sustained. There are concerns.
