Advanced Micro Devices is providing a $300 million loan guarantee for AI cloud startup Crusoe to purchase and deploy its chips, according to The Information. The deal mirrors rival Nvidia's strategy of supporting AI infrastructure companies through financial arrangements.

AMD's backstop allows Crusoe to lease the chips back if it fails to secure AI developer customers, enabling the startup to lock in an interest rate of around 6%. The loan from Goldman Sachs is backed by the chips and related equipment. Crusoe is installing AMD chips in an Ohio data center being built by Canadian developer 5C, which is backed by Brookfield.

The arrangement highlights AMD's push to compete with Nvidia in the AI chip market. Last year, Crusoe CEO Chase Lochmiller told Reuters the company planned to buy $400 million of AMD's new chips. The deal also reflects growing Wall Street concerns about circular financing arrangements in the AI sector, where chipmakers provide financial support to customers who then purchase their products.