In May 2023, Wall Street, led by Blackstone, raised $7.5 billion for CoreWeave, a startup owning AI chips and data center equipment, marking the rise of GPU-backed loans amid the AI boom.
Authored by Douglas French via The Mises Institute,
In an innovative twist on collateral lending, AI chips have emerged as the latest valuable asset. Wall Street, led by Blackstone, raised $7.5 billion for CoreWeave, a startup owning AI chips and data center equipment, showcasing the high demand for Nvidia's GPUs. With over $10 billion raised using AI chips as collateral, this trend highlights the growing reliance on asset-based lending in the tech sector. However, this high-stakes lending comes with significant risks, reminiscent of past market bubbles. As the AI boom continues, the sustainability of these practices remains uncertain.
For lending, as in all things, necessity is the mother of invention. No matter the rate, lenders want to lend and borrowers want to borrow, with both side...
Full Access
Included:
-
Access to All Articles.
-
One Plan. No Tiers.
-
No Ads.
-
Cancel anytime.
