Nvidia faces an uphill battle convincing Wall Street banks to back its $500 billion chip-collateralized financing plan on the terms the GPU vendor wants, according to banking sources and credit managers who spoke to Reuters.

The August initiative, assembled with financiers including Blackstone, Apollo and KKR, envisioned using Nvidia's most advanced AI processors as collateral with limited guarantees — letting AI developers tap pools of capital the way airlines finance jet purchases.

Lenders now want more protection.

Why are lenders asking for stronger guarantees?

Some banks want higher guarantees than Nvidia originally outlined, even for the company's industry-leading AI processors, as they calculate how long revenue from those chips will last.

Three banking sources familiar with the matter but outside the original financing group told Reuters that Nvidia may need to guarantee all of its deals, or back them with revenue streams from investment-grade customers such as a technology firm.

"Wall Street is much more conservative," said Tony Trzcinka, senior portfolio manager at Impax Asset Management, referring to Nvidia's claim that its most specialized chips can earn revenues for a decade.

In a statement, an Nvidia spokesperson said: "AI compute is a productive, durable and fungible asset that can support long-term financing. Our financing partners independently assess each opportunity, including customer commitments, expected cash flow and residual value."

What lifespan do credit investors give to AI chips?

CEO Jensen Huang has argued Nvidia's graphics processing units — the specialized chips whose compute trains and runs AI models — can generate revenue for up to a decade.

Banks and rating agencies see something shorter.

• S&P Global Ratings director Andrew Chang: "Nvidia would imply that the GPUs work well north of five years, and that actually has been proven to be true thus far." Yet S&P "takes a conservative view of the value of those chips."
• Impax's Trzcinka: "Banks typically underwrite GPUs over a 3-4 year depreciation schedule." That differs from Nvidia's decade-long claim.
• TCW's Brian Gelfand, co-head of global credit: "The precedent transactions so far would suggest that the creditor community does not subscribe to long average lives for these assets." TCW manages more than $200 billion.

Nvidia pointed to third-party studies showing major cloud providers extending server depreciation to five to six years, up from three to four. The company also cited Barkr, a valuation firm for AI collateral, which estimates Nvidia's GB300 NVL72 systems carry a useful life of 9 to 10 years.

What comparable chip-backed deals have closed?

Two precedents stand out, and both carry heavy third-party backstops.

• CoreWeave, in which Nvidia holds a stake, closed an $8.5 billion investment-grade GPU-backed loan earlier in 2025. Moody's rated the facility A3 — a rating anchored largely in Meta's contractual payments.
• Broadcom, an Nvidia rival and AI compute financier for Anthropic, backstopped more than 80% of a $35 billion financing structure, helping attract debt investors.

Nvidia itself previously provided a residual-value guarantee supporting financing for SB Energy's Ohio data-center project, according to S&P and Moody's.

How is Nvidia responding?

Tens of billions of dollars of deals in the pipeline now carry stronger guarantees and contracts, two sources told Reuters. Initial transactions will give AI developers access to Nvidia compute, secured by Nvidia's own chips and backed by customer contracts plus the company's underlying guarantee.

"As investors, you're going to be a lot pickier about the levels that you need to get compensated for to take incremental risk," said Loren Moran, fixed income portfolio manager at Wellington Management, which manages $1.3 trillion in assets.

Nvidia has said some of its deals could carry no more than a 25% residual value guarantee — a structure seen as offering less support than comparable AI financing transactions and raising expectations that the chipmaker would need to get more creative.

Five of the company's six financial partners declined to comment on the Reuters report. Apollo did not respond.

What does the circular-financing worry reflect?

The pushback echoes concerns raised by Morningstar analysts, who noted that vendor financing and circular structures — where a supplier helps finance purchases of its own products — played roles in the dot-com boom and bust more than 25 years ago.

The debate lands as hundreds of billions of dollars pour into data centers, chips and power capacity to feed the AI boom, drawing heightened scrutiny of complex financing assumptions.

For now, the market is not ready to treat Nvidia's compute as an investment-worthy asset on par with aircraft — and the chipmaker's path to $500 billion in chip-backed lending now runs through lender demands for stronger structural protection.