Wall Street is betting that AI chips can defy one of finance’s basic rules: that fast-moving technology quickly loses its value. Nvidia unveiled a $500bn deal under which tech groups will be able to lease semiconductors with financing from groups including Apollo Global, KKR, Brookfield, BlackRock and Goldman Sachs. Nvidia chief Jensen Huang has said the pact will create a new asset class underpinned by chips, ripe for investment from the $22tn private capital industry.

But the new funding model also comes with the risk that financiers misjudge the durability of demand for — and the value of — Nvidia’s chips. "The whole thing is predicated on continual investment," said analyst Ben Bajarin. "There’s a risk of overbuild, that demand eases, that models improve and don’t need as much compute."

Nvidia will guarantee that the chips hold at least 25 per cent of their value through the lease term, putting the $5.3tn chip giant on the hook for early losses. The support from the world’s largest financial institutions would mean that Nvidia could pivot away from vendor financing. Analysts said the deal was positive as "the burden sits with the consortium, not [Nvidia’s] balance sheet".