At a glance

  • NVIDIA signed memorandums on 10 August with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilise over US$500 billion for customers buying its compute.
  • The pools lend against compute purchases, so a borrower has to buy GPUs onto its own balance sheet. In Australia that points at the neoclouds.
  • Firmus, Sharon AI, ResetData and IREN buy NVIDIA GPUs onto their own balance sheets. The data centre operators raise against land, buildings and grid connection.
  • IREN closed US$3.65 billion of GPU financing on 1 June at a blended 6.00% cost of debt, rated Fitch A, ten weeks before NVIDIA's announcement.
  • Goldman Sachs worked on both the IREN and Sharon AI financings, so three of the six platform partners are already active in this market.

Six investors sign on to finance NVIDIA's customers

NVIDIA announced on 10 August (US time) that it has signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to build financing platforms targeting more than US$500 billion of third-party capital. The platforms will create "dedicated pools of capital at significant scale at attractive rates for NVIDIA customers", in the release's words, lending against AI compute the way infrastructure lenders lend against a toll road. NVIDIA co-founder and chief executive Jensen Huang made the announcement on CNBC sitting alongside Larry Fink, chairman and chief executive of BlackRock, and told the network: "This is really the first time that technology chips have become an investable asset class."

The six carry the credit risk. Each assesses opportunities on customer demand, utilisation, cash flow and residual value, by NVIDIA's account, while NVIDIA supplies the platform and a limited backstop: "In some cases, NVIDIA may provide a residual-value support mechanism for up to 25% of an opportunity." Bank of America put the allocation in one line: NVIDIA "guarantees asset quality, not the debt". Fink, who traded mortgage-backed securities at First Boston from 1976 and co-founded BlackRock in 1988, named the technique from the capital side: "This is the very beginning, like what it was when I started in the mortgage-backed securities market in the 1970s. I look upon this as a next future for financial engineering."

The borrower has to own the chips

The pools lend against the purchase of compute, which sets the test for who can use them. A borrower needs to buy GPUs onto its own balance sheet, and it needs contracted revenue from selling the output to repay the loan. NVIDIA's release names those customers as frontier AI labs, enterprises and AI clouds.

In Australia that points at the neoclouds. Firmus, Sharon AI, ResetData and IREN buy NVIDIA GPU fleets and sell the compute as a service, which gives a lender both of those things. DUG Technology, the Perth geoscience and high-performance computing company, installed 656 H200 GPUs in January and paid for them from its own balance sheet.

Australia's data centre operators raise against a different asset, and they have raised heavily this year. NEXTDC took liquidity to A$8.4 billion pro forma in May, Macquarie Technology lifted a revolving facility to A$500 million in February, and CDC won an inaugural S&P BBB+ rating that chief financial officer Andrew Carroll said is worth about NZ$10 million a year in interest costs. That capital funds land, buildings, fit-out and grid connection, and in a colocation hall the chips belong to the customer. Goodman chief executive Greg Goodman told the company's 25 May call that the data centre investment required "is likely to exceed the current funding capacity of global capital markets", which is the same demand for capital one layer up the stack.

Australian enterprises reach NVIDIA silicon through hyperscaler cloud rather than owning it, and Australian research runs on grants: NCI was awarded A$32.16 million under the national research infrastructure program for AI compute, and Monash University is building a GB200 NVL72 system. Neither route needs a lender.

Australian GPU debt has a public price

IREN closed US$3.65 billion of GPU financing on 1 June at a blended 6.00% cost of debt, or 3.31% all-in once customer prepayments covering about 45% of the GPU capital cost are counted, carrying ratings of Fitch A and DBRS A(low). The facility is secured against the GPUs and their contracted cash flows, which is the structure NVIDIA's platforms describe, executed by a Sydney-headquartered company ten weeks before the announcement.

Sharon AI's convertible notes inside its US$1.6 billion raise carry a 4.75% coupon to 2032. Terms on Firmus' US$10 billion Blackstone and Coatue facility are undisclosed, as are those on Macquarie Bank's A$165 million senior bridge with ResetData, signed on 13 August and secured on the NVIDIA GPUs it funds. Those disclosed marks are what a pool promising attractive rates gets read against here, and they leave little room above an investment-grade borrower.

Goldman Sachs worked on the IREN and Sharon AI raises

Goldman Sachs was joint lead arranger on IREN's US$3.65 billion and lead placement agent on Sharon AI's US$1.6 billion. Blackstone sits on both sides of Firmus, leading the US$10 billion debt facility with Coatue in February and taking equity in the US$2 billion round this month alongside NVIDIA, and it owns AirTrunk with CPP Investments. Brookfield owns DCI Data Centers.

NVIDIA has been running its own version of the model since early July, a revenue-share and residual-value arrangement with Firmus and Sharon AI among its first partners, covering roughly 210,000 GPUs between them. Law firm Gilbert + Tobin noted in April that commercial banks "particularly in Australia" have yet to participate materially in lending against AI compute. Macquarie signed its A$165 million GPU facility four months later. Futuriom founder and chief analyst Scott Raynovich reads the announcement itself more coldly, noting that the US$500 billion rests on memorandums and that "the money doesn't exist yet".

What to watch

The final agreements. The six memorandums convert to definitive agreements on no published timetable, and no geographic allocation has been disclosed.

A number on "attractive rates". IREN's 6.00% and Sharon AI's 4.75% coupon are the local marks any platform deal would be priced beside.

The fifth borrower. A pool built to widen the buyer pool is worth judging on whether a new Australian name starts funding GPUs the same way.