All roads lead to Nvidia’s balance sheet
Nvidia has met with insurance companies to see if they will take on some of the risk of lending against its chips, as the tech giant seeks to enlist ever wider parts of the financial world to help customers buy more of its semiconductors.
The chipmaker had approached insurance companies about structures that could allow it to shift some of the risk of semiconductor financing to insurers and other investors, people familiar with the talks told the FT.
One idea under discussion is insurance against losses on loans to cloud computing companies, in case these so-called neoclouds default and the Nvidia chips pledged against their debt cannot be resold for enough to repay lenders. But beyond that structure, people familiar with discussions said Nvidia had explored using insurance groups to syndicate risk to alternative investors such as hedge funds.
Nvidia’s head of financial solutions Ingemar Lanevi was leading the talks, people said, adding that they are at an early stage and may not result in any deals.
But the discussions illustrate how Nvidia is casting around for new channels of capital to finance its chips, experimenting with structures across Wall Street, private capital and now the insurance world as it tries to unlock demand from buyers beyond a handful of tech giants.
The talks come as insurers launch a flurry of products aimed at the AI infrastructure build-out, including coverage for credit risk and contract breaches caused by power outages.
Now some are also offering coverage against falls in chip values. Companies including Forward Compute and American Compute have sprung up to offer residual value insurance, covering clients against a decline in the value of tech equipment.