AI Chip Loan Market Shows Cracks
ING is selling $500 million in loans tied to AI data centers at a discount. Michael Arougheti, CEO of Ares Management, says he won't finance AI chip purchases at all.
ING, a bank based in the Netherlands, is unloading $500 million worth of loans that were used to fund data centers powering artificial intelligence technology, at a loss. “We’re not going to provide capital for people to acquire chips for AI,” said Michael Arougheti, CEO of investment firm Ares Management. “I don’t know how quickly those chips are going to obsolesce.”
The value of AI chips depreciates more rapidly than the loan terms for building the data center they’re stored in. This imbalance has spooked investors who previously funded the AI space. Should other financial institutions start selling these loans at a loss, it could make it costlier for everyone involved — from big corporations to startups — to finance the construction of new AI data centers.
Source: www.semafor.com
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Evgenii Arsentev
PhD · Founder & CEO, Dad4Kids
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