Jensen Huang says Nvidia chips could last over eight years as lending assets
Jensen Huang, the head of Nvidia, says his artificial intelligence chips can last eight years.
The short version
- Wall Street usually assumes a four-year cycle for technology hardware.
- Lenders could soon use the valuable systems as loan collateral.
- That long lifespan could lower borrowing risks for big data centers.
Jensen Huang, the head of Nvidia, says the company's artificial intelligence computing systems could retain enough value to support financing, potentially changing how lenders evaluate infrastructure investments. During an interview with Deirdre Bosa of Yahoo Finance on Wednesday at Nvidia's GTC Berlin conference, Huang discussed AI compute becoming more tradable.
He said Nvidia's systems are productive, fungible, and durable. Their useful lives could extend eight years or longer, he said, compared with the four-year replacement cycle commonly assumed by investors and lenders. As GPU futures markets and flexible spot pricing develop, Nvidia's hardware could build significant residual value, and Huang said lenders may eventually use that equipment as collateral when underwriting debt.
The risk involved in underwriting Nvidia's assets is the lowest of any asset out there, according to the CEO. Nvidia's AI boom is increasingly tied to private credit, with CoreWeave, which provides cloud computing services, and other AI cloud providers borrowing billions against Nvidia graphics processing units and data center assets to fund infrastructure expansion.
In August, Nvidia announced partnerships with Apollo Global Management, the giant asset management firm, along with BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs, and KKR to mobilize more than $500 billion in third-party capital over time to finance AI infrastructure development. However, investor Michael Burry criticized Nvidia's plan, calling it a Wall Street stunt involving opaque private-credit arrangements.
Photo: NVIDIA
