{"id":12126,"date":"2025-07-21T04:53:11","date_gmt":"2025-07-21T04:53:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/12126\/"},"modified":"2025-07-21T04:53:11","modified_gmt":"2025-07-21T04:53:11","slug":"ai-arms-race-heats-up-as-startups-borrow-billions-to-buy-nvidia-gpus-crown-equity-holdings-otccrwe-brookfield-asset-mgmt-nysebam","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/12126\/","title":{"rendered":"AI Arms Race Heats Up As Startups Borrow Billions To Buy Nvidia GPUs – Crown Equity Holdings (OTC:CRWE), Brookfield Asset Mgmt (NYSE:BAM)"},"content":{"rendered":"

Amid rising infrastructure demands, AI startups like Crusoe Energy Systems are tapping large-scale credit lines, PitchBook reported<\/a>. Crusoe last month raised<\/a> a $750 million credit facility from Brookfield Asset Management BAM to expand its data centers and acquire more graphics processing units from Nvidia Corp. NVDA.<\/p>\n

That deal reflects a broader trend in venture financing. AI and machine learning startups have secured an outsized share of venture debt so far, accounting for more than a third of the $30 billion deployed across the U.S. and Europe, according to PitchBook. That marks a significant increase from 2024, when such companies attracted 24.9%, or $22.9 billion, of total debt funding.<\/p>\n

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\"\"Why Startups Are Turning to Debt Sooner<\/p>\n

According to PitchBook, the shift toward debt financing is being driven by rising compute costs and high early-stage valuations in AI.\u00a0<\/p>\n

“There are companies coming out of the gate with these large chunky seed rounds,” Silicon Valley Bank Managing Director, Early-Stage Startups Bo Ren told PitchBook. “But then there’s a Series A valuation drop-off because they can’t live up to the VC expectations.”<\/p>\n

Ren said that many AI startups are turning to venture debt earlier in their lifecycle as they struggle to maintain growth targets set by their inflated early valuations.<\/p>\n

Ren also cited infrastructure costs as a key factor: “Given the cost of compute, it’s very much like the price of gas, it just keeps going up and up. That’s where a lot of the venture debt conversations start,” she told Pitchbook.<\/p>\n

PitchBook data shows that the median pre-money valuation for AI startups has climbed to $25 million so far this year, up from $15 million in 2024.<\/p>\n

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Large Debt Deals Backed by GPUs<\/p>\n

Several AI infrastructure startups have recently raised major venture debt deals to purchase high-performance chips.<\/p>\n

Lambda Labs also raised a $500 million special-purpose financing vehicle, collateralized by GPUs it already owned, to expand its chip inventory.<\/p>\n

GPU cloud provider CoreWeave\u00a0 CRWE, which recently went public, raised $2.3 billion in debt with similar terms, PitchBook reported. The loan was backed by the company’s Nvidia GPU stockpile.<\/p>\n

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Some Lenders Are Cautious<\/p>\n

“How long is the useful life of those chips? If it’s 10 years or even seven years, that makes sense,” CIBC Innovation Banking Executive Managing Director and Co-Head Paul McKinlay told PitchBook. “But if it’s two years, that starts to become a tougher proposition.”<\/p>\n

Venture Debt’s Rapid Expansion<\/p>\n

PitchBook reported that total venture debt deployment reached $53.3 billion in 2024, a 94.5% increase from 2023. That growth was primarily fueled by later-stage startups preserving valuations amid slowing VC rounds.<\/p>\n

In 2025, AI is driving the next wave of venture debt demand\u2014now extending to earlier-stage companies.<\/p>\n

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