Nvidia Corp. (NVDA) just signed deals with six of Wall Street's largest money managers to build financing platforms that could funnel more than $500 billion into AI infrastructure. Critics are blathering on about so-called circular financing – which demonstrates a complete lack of understanding about what that actually is, says Keith Fitz-Gerald, editor of 5 With Fitz.
Here’s the meat of the matter: Many of Nvidia’s customers need more chips and data center capacity than they can pay for in cash. Thanks to Nvidia, they will now be able to go to the new independent financing platforms set up by Nvidia and the six big Wall Street firms to borrow the money.
(Editor’s Note: Keith is speaking at the 2026 MoneyShow Masters Symposium San Francisco, scheduled for Aug. 25-28. Click HERE to register.)
Nvidia Corp. (NVDA)
The customer then uses that borrowed money to buy Nvidia chips and build the data centers. Over time, the customer repays the lenders with interest using the revenue generated from running AI workloads on those chips.
Nvidia itself does not lend the bulk of the money, so there is no impact on its operations nor immediate impact to its balance sheet. In fact, in some cases it may even offer limited residual-value support (up to 25% of a deal) to make the financing more attractive to the banks even though the primary capital and risk assessment comes from Wall Street firms.
CEO Jensen Huang told CNBC: “This is really the first time that technology chips have become an investable asset class.”
I agree. Only we’ve been talking about this for the better part of several years. Chips have always been an investable class in my mind. Wall Street has simply never had that brain cramp because they consider ‘em a product whereas I consider ‘em a “must have” product and service.
Big difference.
