Wall Street’s largest financial institutions have loaned more than $11bn to a niche group of tech companies based on their possession of the world’s hottest commodity: Nvidia’s artificial intelligence chips. Blackstone, Pimco, Carlyle and BlackRock are among those that have created a lucrative new debt market over the past year by lending to “neocloud” companies, which provide cloud computing to tech groups building AI products.
“The Microsoft contract was critical,” said a person close to the deal. “They won the contract then said we need $2bn of GPUs, which we were able to finance.” Like traditional asset-backed lending, in the event of a default, the lender would own the GPUs as well as the contracts — known as power-purchase agreements — with the companies that lease them. CoreWeave’s success raising large sums of private debt has prompted more lenders into the space.