Nvidia GPUs can be used as collateral to borrow. Financial Times reported that $11 billion of loan was created for these chips.
That’s something too creative for me.
I think it’s generally safe to borrow against assets with a growing value.
Chips, however, are like cars to me, depreciating… with new versions better than the previous one.
Well, it seems you can borrow against your car, but that’s still based on your ability to pay back the loan.
So how does it work?
Maybe it’s actually a loan borrowed against the “service contract” or rental agreement carried by the chips, which makes it more like an asset with “yield”.
But still, this market sounds a bit too arbitrary…
Hard to imagine that the rental income will be stable or rising, as Nvidia chips supply is up to Nvidia and TSMC. That capacity can increase over time.