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Blackstone’s $2.3 billion CoreWeave loan helped establish chip-backed financing, a model now spreading across AI infrastructure and contributing to a reported trillion-dollar lending boom.
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Blackstone's $2.3 Billion CoreWeave Bet Sparked a Trillion-Dollar AI Lending Boom In 2023, executives at Blackstone (NYSE:BX) asked CoreWeave (NASDAQ:CRWV) two questions: “What is a GPU?” and “Is AI real?” Three years later, the $2.3 billion financing Blackstone helped arrange has become the blueprint for a chip-backed lending market that could reach $1 trillion, Bloomberg reported Friday. How Blackstone Found a Way to Finance AI Chips CoreWeave had a major customer in Microsoft (NASDAQ:MSFT). But it needed billions of dollars to buy the Nvidia (NASDAQ:NVDA) chips required to provide Microsoft’s computing power. The problem was that CoreWeave was a relatively small company that had started out mining cryptocurrency. It couldn’t finance those enormous purchases on its own. Blackstone and Magnetar Capital found a solution. They arranged a $2.3 billion loan secured by the Nvidia chips CoreWeave purchased and its contracts with Microsoft. That gave lenders something to rely on beyond CoreWeave’s finances: expensive equipment they could recover if things went wrong, and payments expected from one of the world’s largest technology companies. Wall Street Turns Chips Into an Asset Class Blackstone’s approach caught on. In 2024, it and Magnetar arranged another $7.5 billion loan for CoreWeave. By March 2026, CoreWeave could borrow much more cheaply. It secured $8.5 billion backed by contracts with Meta Platforms (NASDAQ:META), with part of the loan carrying interest of just 5.9%, compared with rates in the mid-teens in 2023. Lenders now had greater confidence in getting their money back, thanks to Meta’s financial strength. Other AI companies are adopting the same approach. In June, Apollo Global Management (NYSE:APO) and Blackstone announced a $35 billion deal to finance chips for Anthropic, with Broadcom (NASDAQ:AVGO) helping protect lenders against losses. Broadcom is also working on a proposed $60 billion loan for a company that would buy chips and rent them to Anthropic, Bloomberg reported. By August, the lending boom had grown so large that Nvidia itself was working with six Wall Street giants on a plan to mobilize more than $500 billion for AI infrastructure. Blackstone executive John Watson compared the opportunity to the early days of car financing, when lenders weren’t sure people would even buy automobiles. “We have a similar vision for compute,” he told Bloomberg. The Risks Behind the Boom Lenders structure the loans to be repaid over five or six years, roughly the period they expect the chips to lose their value. But some investors worry the chips could lose value faster than expected, leaving lenders exposed if borrowers default. But Nuveen’s Laura Parrott told Bloomberg she is holding off on big investment-grade-rated chip deals because the structures have not been tested through a disruption. Fitch Ratings’ Jason Pompeii warned that concentrated vendor financing increases the risk of “ripple effects throughout the supply chain” if AI disappoints. On Polymarket, traders put the probability of a qualifying AI industry downturn at 9% by December 31, rising to 21% by June 30, 2027. Both contracts require at least three specified distress events within 90 days. CoreWeave’s unsecured bonds have recently yielded around 15%, even as its chip-backed loans remain near face value, a divide Benzinga reported this week. Image: Shutterstock Read Also: 'Intel Plus Elon' Could Pose Bigger Threat to TSMC Than Musk Alone, Chip Analyst Says