NVIDIA AI GPUs used as collateral for loans, startup secures $10B in funding with AI chips

NVIDIA AI GPUs are being used as collateral for huge loans, with UK-based startup Fluidstack using its arsenal of NVIDIA AI chips to secure over $10 billion in loans.

In a new report from The Information picked up by insider @Jukanrosleve on X, we're hearing that in the past CoreWeave pioneered a new financial model by raising $9.9 billion in funding through GPU-backed financing to purchase AI chips and leasing them out to clients including OpenAI, effectively "paying off debt with GPUs".

Led by CoreWeave, multiple AI cloud computing startups are expanding their financing using high-performance AI chips as collateral, with the total loan volume exceeding $20 billion. However, there are potential risks involved with this financing model because of the short product lifecycle of NVIDIA GPUs which sees the AI chips depreciating rather quickly.

London-based AI startup Fluidstack was founded back in 2017 and has revenues of $65 million in 2024, but expects to see a huge injection of revenue of over $400 million in 2026. Fluidstack provides chip leasing services to clients including France's Mistral AI and Germany's Black Forest Labs, but they're also in talks with Goldman Sachs and JPMorgan for potential debt financing.

Fluidstack is now drawing funds from lenders as required, and might not borrow the entire approved amount, with key challenges from financial institutions is "how long the value of NVIDIA GPUs can be maintained". NVIDIA has been reducing the development cycle of its AI GPUs, which increases the risk that the value of existing AI GPUs would depreciate quicker.

CoreWeave estimates that the useful life of AI GPUs is around 6 years, but the acceleration of AI GPU product cycles could lead to much faster depreciation, which raises concerns about a decline in collateral value. Investors are now demanding high interest rates and strong collateral decisions to protect themselves.

There are some companies that are attempting to use AI GPUs that aren't from NVIDIA, including AMD, as collateral assets in order to diversify their risk. Startup TensorWave is looking at debt financing that's backed by AMD chips, which The Information reports that this would be one of the precedent-setting cases for AMD AI chips as collateralized financing.