Nvidia is drawing Wall Street into the expansion of AI. Its stock dropped following the announcement.

      A consortium of financial firms is collaborating with Nvidia on a $500 billion funding initiative aimed at AI infrastructure. This group includes Apollo Global Management, Blackstone, BlackRock’s Global Infrastructure Partners, Brookfield Asset Management, Goldman Sachs, and KKR. The Financial Times was the first to report on the discussions, which have since been confirmed by Bloomberg through sources familiar with the situation. A potential deal could be announced as soon as Monday.

      The news was not positively received by the market, as Nvidia's shares dropped by as much as 3.2% on Monday, trading at $219.01 in the early New York afternoon, down 2.2% for the day.

      However, the situation is not straightforward. Very few details about the funding package have been finalized. Bloomberg's sources were unable to specify which projects or companies would benefit from the funding, what form it would take, or whether the $500 billion represents new capital.

      This last detail is particularly significant, as Nvidia has already revealed numerous commitments worth hundreds of billions of dollars throughout the AI supply chain this year. A package that merely reorganizes existing commitments differs greatly from one that introduces new funds.

      BlackRock and KKR opted not to comment to Reuters, while Nvidia and the other involved firms did not provide an immediate response.

      For most of the year, Nvidia has been self-funding its demand. It has been negotiating a $250 billion backstop with OpenAI for leasing computing power at a 10-gigawatt facility being developed by SoftBank subsidiary SB Energy in Ohio. Furthermore, it has discussed financing approximately $350 billion in chip purchases for OpenAI and expanded its partnership with South Korea’s SK Group to over $500 billion in mutual business, along with a notable investment in Ilya Sutskever’s Safe Superintelligence.

      The overall trend reveals a consistent pattern: Nvidia secures the customer, the customer purchases the chips, and the revenue subsequently returns to Nvidia.

      The decline in shares following the $500 billion deal can be attributed to investor concerns regarding a concept known as circular financing. This term describes a situation where a supplier finances a buyer, who in turn funds the supplier. Critics of this arrangement argue it can artificially inflate demand and valuations across an entire sector until a breakdown occurs.

      Nvidia has faced this criticism throughout the year. When it announced $750 billion in deals earlier in 2026, the response from its own credit market was not positive.

      Involving six external financial entities could address some of this criticism, as it diversifies the financial responsibility beyond the chipmaker. It also places independent underwriters between Nvidia and the projects in question.

      However, this solution is contingent on genuine underwriting. Private credit and infrastructure funds are currently more intertwined with the AI sector than ever before, and the Bank for International Settlements has pointed out similarities to credit structures prior to 2008.

      The firms involved are not newcomers to the industry. Apollo and Blackstone established a $35 billion fund focused on Google TPUs, and Morgan Stanley facilitated a $917 million loan secured against Lambda’s Nvidia GPUs.

      In September 2024, BlackRock, Global Infrastructure Partners, Microsoft, and MGX formed the AI Infrastructure Partnership, aiming for $30 billion in equity and up to $100 billion including debt. Nvidia and xAI joined in March 2025, with Nvidia taking on a role as a technical advisor rather than a capital partner.

      Nvidia's CEO Jensen Huang described this arrangement broadly at that time, stating that the global expansion of AI infrastructure would benefit any company or nation aiming for economic growth and seeking solutions to the world's critical issues.

      A $500 billion funding package would approximate five times the scale of that earlier initiative, bringing Nvidia closer to substantial financial resources.

      However, the key figure to consider is not simply $500 billion. Major tech companies are projected to invest more than $730 billion in AI this year. Nvidia also returned to the U.S. bond market in June, marking its first debt issuance since 2021.

      In this context, a financing arrangement of half a trillion dollars, while significant, is not outside the realm of possibility. The more pertinent question, however, is narrower and more complex: If the data centers are constructed and the anticipated demand fails to materialize, who ultimately bears the loss? That uncertainty currently remains unresolved, with potential losses resting on Nvidia, a pension fund, or a private credit investor misled into believing this was solely infrastructure.