Wall Street just endorsed Jensen Huang's 'big concept' for AI. What now?
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- Jensen Huang appeared on CNBC alongside leaders from Goldman Sachs, BlackRock, Blackstone, KKR, Apollo, and Brookfield, announcing the firms are willing to raise $500 billion — and potentially more — to build out AI factories.
- The agreement rests on signed memos of understanding rather than contracts, with Huang calling AI systems 'revenue-generating assets' that are 'long-lived, fungible, flexible.'
- Nvidia retains an option to backstop 25% of every loan, and borrowers must use Nvidia-specified system architectures that allow another operator to take over if the borrower fails.
- Alphabet, Amazon, Meta, Microsoft, and Oracle have already raised over $150 billion combined this year through debt and equity for AI data centers, while Intel recently upsized a stock offering to $20 billion.
- Short seller Michael Burry warned late last year that Meta, Oracle, Microsoft, Google, and Amazon were overstating the useful life of their AI chips and understating depreciation — a parallel to subprime risk that the CNBC panel did not address.
- BlackRock CEO Larry Fink drew a direct comparison to his early career in mortgage-backed securities in the 1970s, calling AI infrastructure 'a next future for financial engineering.'
- Nearly 11 months ago, Nvidia announced a $100 billion OpenAI data-center partnership that never materialized, though it ultimately contributed $30 billion to OpenAI's record funding round.
Why it matters: The plan shifts AI's capital burden from tech-company balance sheets — some of which have already turned cash-flow negative — onto Wall Street, but Fink's MBS comparison and Burry's depreciation warnings show the 'new asset class' carries subprime-style risks that participants acknowledged but did not price.
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