Banks now take Nvidia chips as collateral on Asian data centre loans.
Bloomberg reported on Tuesday that banks lent about $3.8 billion against Nvidia chips and the rent they earn. Nvidia agreed to buy any computing power the borrowers cannot sell, which backstops the loans. Six more banks are weighing similar deals, with Asia's data centre spending projected at $8.2 trillion by 2050.
Why it mattersHouses hold value for decades; a graphics chip can lose it in one product cycle. If the rental market cools, the losses land on banks, not only on AI firms.
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