Goldman Sachs joins talks on Nvidia's $500B AI deal

Goldman Sachs is in talks with a broad range of potential investors about joining Nvidia's $500 billion AI financing initiative, after drawing on years of close ties with the chipmaker to secure a prized role in the deal, according to people familiar with the matter.

The insurance companies, money managers, and banks of the US will comprise the primary investor group for the funding, says one individual. Asset managers are also set to take a substantial portion of the total pool, claims another person.

Nvidia said on August 10 that it would work with six leading financial firms, including Goldman Sachs, to build compute platforms to raise over $500 billion of third-party capital for AI infrastructure.

Goldman can supply junior capital and private credit financing through its asset management arm, while its investment bank can help place debt into private credit funds and eventually public debt markets, the second source said.

The first source said Goldman had already held discussions with banks, asset managers, insurers and private credit firms about potential structures.

As the sole bank in the consortium alongside firms like Blackstone and Apollo, Goldman's position reflects a relationship built over years, including its role as exclusive adviser on Nvidia's $6.9 billion Mellanox acquisition in 2019 and as a lead underwriter on the chipmaker's $25 billion bond sale in June.

In contrast to the previous AI infrastructure investments where guarantees were provided by vendors (like Broadcom guaranteeing residual value on about $30 billion worth of loans backed by Anthropic's chip funding), Nvidia's approach allocates a lot more risk to the investor consortium.

According to Nvidia's CEO Jensen Huang, "We ourselves can backstop up to $125 billion in deals, 25% of what the deal could be."

According to the second source, the objective is to create an asset-backed AI compute market that is closer to traditional securities and may help reduce funding costs and broaden the pool of investors.

Goldman Sachs Research estimates that just the four largest hyperscalers will invest $5 trillion in technology and data centres alone by 2030. Bank of America analyst Vivek Arya called the structure "a pivot away from vendor financing", noting that the burden now sits with the investor consortium rather than Nvidia's own balance sheet.