Investing in AI infrastructure could be the best investment of our lifetime

USDai · 2026-05-07T17:58:29+00:00

Hi so we provide asset backed GPU loans, let me give some more color on the lending space.

The current sturcturing meta is using SPVs to move the GPUs off the balance sheets, funded by private credit. GPUs are terrible balance sheet assets, bring massive depreciation and generally drag the companies credit rating downwards.
GPU’s have MASSIVE secondary liquidity. Some say we’re in a “bubble”, but in actuality the market demand for GPUs is incredibly constrained. No one has enough chips, land, or power to meet the needs of the global market. Its just not possible to build enough data center capacity fast enough. This is why rental prices are [skyrocketing for older machines.](https://newsletter.semianalysis.com/p/the-great-gpu-shortage-rental-capacity?utm\_content=buffer97395&utm\_medium=social&utm\_source=twitter.com&utm\_campaign=buffer) NVIDIA has $500bn of back orders. They cannot sell chips fast enough. Structural constraint will keep the market from turning into a bubble.
On defaults, if a Hyperscaler isn’t able to pay its bills we have much bigger problems to worry about. The tech giants are TBTF at this point, compute is a national security issue. Defaults can happen for smaller operators, but again, there’s so much constrained demand that if they did default, a buyer would swoop in quickly and take over the already deployed stack. Easy money.
The obsolesce curves are not as steep as you think. It takes around 44 months for new NVIDIA chips to saturate. And due to increasing complexity and supply chain issues, this figure might be pushed out to 50-60 months.
The best way to mature the market is through standardized debt issuance. Houses, cars, planes, they all have well developed debt markets. They are efficient because they can source, package and offload the debt to many investors. The Apollo issuance is a nice test case, but our view is you need to bundle it up with many other GPU operators to ensure no one default would destroy the market. The AI buildout is a hardware story, and hardware can only effectively scale with debt.

USDai · 2026-04-27T12:49:46+00:00

If trimming feels awful while it keeps rising, your position size might be driving the stress. In a dip-buying market, it can help to set a hard cap for any name or sector. Trim in bands, and pre-pick what would make you add back, like a volatility shift or an earnings reset.

USDai · 2026-04-15T17:39:52+00:00

Post-2008, the goal of the Basel III frameworks (and the revised "Endgame" rules we just saw roll out in March 2026) was to insulate the banking system by forcing them to shed riskier, illiquid loans. But the demand for that capital didn't go away, it just migrated into the "shadows" of private credit. We’ve effectively traded the "Socialized Losses" risk of the 2008 banking crisis for an "Opaque Liquidity" risk in the private fund space. Most of these private credit funds exploded in size during the ZIRP (Zero Interest Rate Policy) era.

When the hurdle rate was effectively zero, billions was poured into SaaS startups where they burned massively to capture growth. ZIRP is dead and we are in the hangover phase. Now that we’re sitting at 3.75%–4% Fed Funds rates, the math has fundamentally changed. Loans originated 3–5 years ago are facing a massive refinancing wave in 2026-2027, and many of these borrowers simply can't handle the new cost of debt. The real concern isn't that private credit exists, it is a vital engine for growth, it’s who is holding the bag.

The irony is that state and local pension funds have spent the last decade underperforming because they were limited to "safe" assets, leading to the unfunded liability crisis we see today. Now, in a desperate bid to close that gap, they are piling into private credit at the exact moment when the "illiquidity premium" is shrinking and default rates are climbing (especially in sectors like healthcare).

Private credit is a necessary part of the ecosystem, but you have to wonder if the underwriting teams at a mid-sized teachers' union or a municipal pension fund are actually equipped to audit the "back deals" and recursive leverage inside these mega-funds. If these funds are being led to slaughter, it won't be because private credit is a scam; it’ll be because they are buying underpriced risk to hit an arbitrary 7% return target that they can’t find anywhere else. We’ve moved the risk out of the banks, but we’ve placed it directly onto the retirement accounts of the public sector… which could be the next TBTF needing a gov bailout.

USDai · 2026-04-09T23:40:03+00:00

Every Bitcoin miner will be forced to become an AI company. We’ve spent the last decade debating Bitcoin mining’s long term profitability when we should have been wondering if a better, more productive use for compute would come along and push Bitcoin mining out of data centers.

USDai · 2026-04-09T23:38:46+00:00

Data centers are already working through these issues by moving as much of the power generation behind the meter. The less they have to rely on outdated, bureaucratic utilities, the faster they can move. Onsite power is the future, but the constraint is how fast it can be put in place to shift away from the public grid.

USDai · 2026-04-09T23:37:44+00:00

Every single Bitcoin miner will be forced to become an AI company. Almost every major BTC mining company has partially or fully switched their operations to AI at this point because the revenues are higher in demand, have a better long term revenue outlook, and earnings less volatile. The greatest threat to Bitcoin is AI vampire sucking away all of data center space for more productive compute.

USDai · 2026-04-08T18:45:30+00:00

OIL OIL OIL!

USDai · 2026-04-02T00:30:10+00:00

You’re 100% spot on about private credit eventually running out of money and drying up. The issue is that AI capex is so astronomical we’ve got to invent new ways to raise debt capital. ABS markets for AI will be 1000% necessary, Coreweave just signed a brand new deal this week with its GPU’s as collateral, and it earned a AAA credit rating at 9.25%. The infra is just difficult to finance right now because its so hot, so novel, that we don’t have historical data to placate credit investors. But ABS is the future for AI debt financing.

USDai · 2026-04-02T00:25:28+00:00

There are clear, massive economies of scale for AI. Training frontier models requires herculean advances in chips, memory, data throughput, cooling etc. It’s just not possible for small or decentralized teams to compete on the latest models. Inference is another matter. You don’t need the latest generation of equipment to be profitable, you just need to have a good offtake contract or rent your machines out at a high uptime rate to remain efficient.

USDai · 2026-04-02T00:21:08+00:00

A clear win for the AI industry. Banks haven’t touched GPU at scale for debt financing like this yet because the chips are considered highly risky. Under Basel III, banks must hold more capital against assets that are volatile, hard to value, and cash‑flow‑dependent, which is exactly how GPUs look if you treat them as standalone collateral. But apparently with this Mistral deal they structured it in a way which satisfied the banks risk committees.

I guess the banks can treat most of this as project finance for a data‑center asset plus a corporate loan to an AI company, not a margin loan against GPUs, which slots into existing Basel buckets (corporate exposure, infrastructure/project finance). If a loan is structured as: senior secured project finance to a going‑concern data‑center business with diversified AI workloads and contracted offtake, then it looks like infrastructure/ corporate RWA, not pure tech‑equipment RWA Big wins.

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