Goldman is in Talks with Investors on A Financing Package for Nvidia

After using its long-standing relationship with the chipmaker to secure a coveted role in the deal, Goldman Sachs (GS.N) is in talks with potential investors about taking part in Nvidia’s (NVDA.O) $500 billion AI financing initiative, according to people familiar with the matter.

According to one of the sources, U.S. banks, money managers, and insurers are anticipated to make up the majority of the financing’s investors, while asset managers intend to keep a substantial portion of the funding, according to another source.

In an effort to raise more than $500 billion in third-party funding for AI infrastructure, Nvidia said on August 10 that it had teamed with six significant financial institutions, including Goldman, to create computing platforms. As governments, businesses, and startups rush to build out data centers to accommodate AI workloads, the move demonstrates how the growing demand for AI processing power is attracting institutional investors.

According to the second source, Goldman’s investment bank can assist in placing the debt into private credit funds and eventually public debt markets, while its asset management arm can offer junior capital and private credit financing.

According to the first source, the company had discussed these kinds of structures with a variety of investors, including banks, asset managers, insurers, and private credit companies.

The Wall Street bank’s pivotal role as the only lender on the transaction, in conjunction with alternative asset management behemoths like Blackstone (BX.N), opens new tab, and Apollo, represents the conclusion of years of collaboration with Nvidia.

According to Dealogic, Goldman Sachs has advised Nvidia on a number of transactions and technology financing agreements in which the chipmaker was an investor. Additionally, the bank acted as an exclusive finance consultant on Nvidia’s $6.9 billion acquisition of Mellanox Technologies in 2019 and was one of the primary underwriters on the chipmaker’s $25 billion bond issue in June.

According to a second source and a third person with knowledge of the situation, the bank’s IT teams and Nvidia have strong relationships that reach both businesses’ top executives.

At a technology conference organized by the Wall Street firm, Nvidia CEO Jensen Huang was interviewed by Goldman Sachs CEO David Solomon less than two years ago.