Nvidia is creating a fund of more than $500 billion of third-party capital to facilitate the buildout of AI infrastructure over time, according to the company and its six financial partners.
The impact of this cash infusion on enterprise AI is uncertain, but analysts fear it could increase enterprise AI infrastructure costs and exacerbate the shortage of AI chips for data centers.
The announcement from Nvidia and financial partners Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR described a fund to establish the first compute financing platforms at global scale to enable the AI infrastructure buildout across Nvidia’s ecosystem.
This fund will create dedicated pools of capital at significant scale at attractive rates for Nvidia customers, although the precise amount of money earmarked for the fund was unclear.
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Simon Maine, managing director for communications at Brookfield Asset Management, said the finance partners are not collaborating together on this, but rather it is a series of individual partnerships.
CIOs are concerned about the potential impact of this fund on chip pricing and availability, with almost all analysts and consultants speculating that it would likely increase prices and worsen chip shortages.
Ashish Nadkarni, a group VP for IDC, said there is an assumption that these investments will go toward building fab capacity, and that the fabs will produce chips to address a chip shortfall.
Mark Tauschek, a distinguished analyst at Info-Tech Research Group, argued that the fund would likely make the chip shortage worse, at least initially, and projected a cost hike for enterprises.
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Sanchit Vir Gogia, chief analyst at Greyhound Research, agreed with Tauschek, estimating that AI chip prices would be roughly the same for another year, and increasingly only at a good price if customers sign a long-term commitment.
Mike Wilkes, enterprise CISO at Aikido Security, said the improved availability of funds could finance the AI buildout at much greater scale.
Justin Greis, CEO of consulting firm Acceligence, agreed that the short-term impact of this agreement may not be good for enterprise IT.
The next period could remain challenging.
