Closing Bell Overtime: Nvidia, Wall Street Titans Talk Funding AI 8/10/26

The Bell is bringing an end to the trading day at the NISC Western midstream partners ringing the bell and at the NASDAQ turns therapeutics doing the honors. Book of the closing bell over time live from Studio B at the NASDAQ Market site. I'm Mike Santoli. Melissa Lee is off today. Stocks modestly lower today as oil and yields both rows to down down about a hundred points the S&P finishing just below the flatline. The NASDAQ the underperformer off about a third of a percent. Energy and healthcare were the leaders real estate and utilities lagged. The action was in the software sector seeing yet another bounce and outperforming the semis on the day more on that just ahead and bond yields moving higher as oil rises ahead of key inflation data this week the 10 year ending the day at 4.7% are the two-year close at 4.24. Let's get more now on today's action with Christina Parks and Neville. Let's Christina. Well Mike you said it stocks finished lower today taking a breather though after the S&P 500 closed at a record high last week. Still under the service the rally looks healthier than it has in a while more than 73% of the S&P 500 now treats above its 200 day moving average the broadest participation in over a year in technology roughly 70% of the NASDAQ 100 cleared that same line AI financing though drove the headlines today until launching a 15 billion dollar stock offering to fund its AI push boomer Bloomberg now putting out that it's being over subscribed already in video working with Wall Street asset managers including Blackstone BlackRock and Apollo to name it just a few on a $500 billion effort to finance AI infrastructure you see in video shares closing almost eight 3% lower I should say and then you had software and cyber leading the upside a crowd strike Palo Alto networks closed at record highs on demand for AI powered security out of black cat Palantir you can also see climbed about almost 2% higher today HP Enterprise Rose and a Morgan Stanley upgrade tied to its Juniper networking bet Microsoft plans to ramp up production of its own AI chips next year and win over cloud customers like Anthropic per the information and that's where you saw shares rise about 1% and last but not least for sure for sure halfway I ticked up after quarterly profit more than doubled on investment gains Mike. Christina thank you. Well energy the outperformer today has crewed climbed in the US oil reserves hit multi decade lows Pippa Stevens has all that for us. Hey Michael brand is inching back towards 90 as a deal between the US and Iran has failed to materialize with President Trump telling Axiots over the weekend that the US is only semi negotiating with Iran that comes as transit through the straight dropped to just 13 yesterday the lowest in a month per plants after an ad-knock linked tanker was hit while crossing. Now one of the key factors that's kept a lid on oil prices is the continue drawdown from the SPR which is now under 300 million barrels for the first time since 1983 according to DOE data released today now not only does that have to be refilled at 120 percent but there are growing concerns about structural damage to the SPR sites thanks to two large and fast drawdowns in the span of just four years. But the real tightness continues to be in product markets with heating oil futures adding another 6 percent today while European diesel is up nearly 9 percent on the day in addition to the ongoing supply issues thanks to the straight up for moves being closed and Ukraine attacking Russian refining infrastructure the drought in Europe compounding issues some nuclear plants are offline increasing demand for other fuels while low river levels are impacting product transport and supply Mike. Pepa thank you while we have breaking news on the AI front Becky quick here with all these details a pretty big development the AI infrastructure build out. It is and we can confirm a story that was reported earlier this morning first by the financial time that's been then confirmed by CNBC but this is the story that Nvidia is coming together with some of the biggest names on Wall Street put together half a trillion dollars of independent financing to kind of push AI forward to build the AI infrastructure out. These are independent third-party capital that they're bringing in there going to be strategic partnerships in video has signed partnerships with six of the biggest names on Wall Street for these memos of understanding so basically Nvidia will find its customers that need help with AI build out need financing for this and put them together with these partners that are pledging again over half a trillion dollars that they will find to come into this. You didn't see Nvidia shares trading lower today on some of this news. I think that's probably because not all the details were out there Nvidia is not putting up any of the money this isn't a circular deal this is Nvidia basically playing matchmaker to bring together some of these names that have already been pretty active when it comes to financing for some of these deals and making sure that their customers are going to be able to come up with financing they need for some of these things too. We do have this news that's out here and in fact we're going to be sitting down not only with Jensen Long the CEO of Nvidia but the principles of all of these companies that are involved with this too so all six of the major firms you can consider this AI financing round table that we're going to be sitting down and speaking exclusively with all of them in just a few minutes. I know that all those details we fleshed out in that conversation but it seems more just a kind of a centralized node of financing in an industry that has been kind of scrambling from every direction and trying to secure this special purpose vehicles there's individual bank and so I guess this might be a little more of a one-stop. This is a huge hefty expensive build out we know the numbers are huge I think Morgan Stanley has been estimating that the hyperscalers alone will spend about three and a half trillion dollars between 2026 27 and 28 so over the next year and a half to make sure that they are building things out but it requires not just the data centers not just the chips you need power that comes into play you need real estate to find some of these and the names that are involved with this are some of the again the biggest and best names on Wall Street got Goldman Sachs BlackRock Blackstone KKR Apollo and Brookfield and again these are details that we're just learning ourselves on some of these things but I the way I kind of think of it is if you go to GM and you buy a car you might get GM financing to offer you some of these things this is basically Nvidia bringing together other great names where they have finance to do that financing for you to make sure you know gents along a long time has been looking for bottlenecks that would prevent AI from getting its to its full growth potential I think this is a bottleneck that they've identified and said here's a way that we're gonna go about doing that right for customers that are not called you know alphabet or something where they can just go raise tens of billion dollars on their own yes that's right so we'll be sitting down with all of them in just a few minutes absolutely thanks so much we look forward to that let's talk a little more about the broader market picture earnings have been the big support under the indexes with stocks near record highs the S. P. 500 profit growth tracking for its strongest pacing years but as those earnings reports wind down what will be the next swing factor for this market joining us now is Pinky Chata Deutsche Bank Chief Global Strategist Pinky it's it's great to have you here I mean things have really obviously played to script in a large large part based on how the earnings have come through so much better than even high expectations that's obviously giving support to equity valuations we can I guess pull it apart and say some of its extraordinary factors but very strong no matter how you look at it where does that leave us now that the S. and P. is has kind of vaulted back to the all-time highs and we're facing a little bit of a maybe a little bit of a small law in corporate fundamental reports sure you know first thing I would say is you know yes the market hit a new high last week but it's not sort of aligned with the kind of earnings growth that we are seeing I would say if you take a look at equity positioning you know our measures would suggest sort of the markets aligned with 14 15% growth if you look at our large cap measure and and obviously you know we are getting basically our read after taking out some of the investment gains for some of the hyperscalers you know we're talking about 34% so clearly you know yes earnings are great earnings the market you know is cautious now I think that's basically a good thing if you take a look at the bottom up consensus for Q3 and Q4 it's still in the mid 20s so I would argue where the market is especially in terms of positioning it's pretty cautious relative to the kind of earnings that we are getting and you know what will turn that around is just greater belief so if we keep getting them you know expect positioning will rise and I would also emphasize that you know we tend to look at positioning it moves the market shorter term it's a big deal it's fast but the other drivers of the market which would be the inflows they are absolutely booming they're sort of in line with what's happening with the earnings growth and of course we have great earnings you know you're going to have big buybacks the buyback payout ratio despite everything that's going on for the S&P 500 is still sort of in the 50% range so I would argue the other two engines are just as important the first engine which is positioning and how investors feel about it you know is still a little bit on the cautious side and has upside-down yeah I mean obviously there is demand coming through in those inflows and buybacks that's offsetting some of that new equity supply that we were fixated on for a while it's a fair point that there's certainly room for investors to re-risk here bring their exposures up after our turbulent July but you know if we go back to last October S&P trading at 23 times forward earnings in the line was well the S&P is obviously looking ahead to an acceleration earnings growth we've now got the acceleration earnings growth 2027 almost no matter what happens it's going to be maybe strong but decelerating so how does that play into the remainder of this year so for the reasons that I mentioned which is positioning is not really caught up to earnings growth There's an automatic buffer there, so we're not going to price Algovid in price in I would say And as long as growth is fine. I think the market will be absolutely fine. We're going to be you know How much and how fine it will be but I would say the market will be absolutely fine I would also point out that I mean, you know Q3 earnings are not completely done if you look at the bottom-up consensus It's very much sort of in line with the guidance that we're getting from companies And in fact for Q3 the guidance that we have so far suggests that you know upgrades to the bottom-up Panelist consensus should basically continue for a little bit longer It's looking for 25% earnings growth and the guidance is saying to which it has basically hogged for the last several years I would say is saying we should be at 27 or 28 though source of off-dye basically Yeah, we absolutely will see if even if it's I guess partly a pull forward of Avertings power. We're not going to know that for a while so the market can certainly ride it while it lasts Binky we'll have to leave it there for now talk to you again soon really appreciate it Binky Chata from Deutsche Bank Coming up we'll be speaking with the CEOs of in video Goldman Sachs BlackRock Blackstone Apollo and Brookfield Plus the global head of a digital infrastructure of Kkr the companies are teaming up for a new $500 billion AI infrastructure push you're watching closing about overtime live in the Nasdaq market site Well come back to closing bell over time we have this big breaking news this afternoon about what's been happening when it comes to the AI Infrastructure bill this is news that was first out a little earlier today But we can confirm that news at this point in video working with some of the biggest names on Wall Street to secure financing for its customers Joining right now with us to talk about all of this is Jensen Wong. He of course is in videos founder and CEO David Solomon is the CEO of Goldman Sachs Larry Fink is BlackRock CEO John Gray is Blackstone's president Vladimir's Lasak is global head of digital infrastructure at Kkr Jim Zelter is Apollo's president and Bruce flat is Brookfield CEO and gentlemen welcome to all of you today It's kind of amazing to get this group around the table and Larry to have you Joining us remotely too But we have to start with this news Jensen This is a big deal and it's a big number Half a trillion dollars more than that in terms of financing. We know this is an expensive bill But tell us a little bit about how this came together and what exactly it is well first of all I want to thank all of my partners for joining me here today. I think this is first time This has ever happened before and and I can't imagine a more important time to do it We're announcing six Partnerships today these partnerships are going to pull together independent long-term capital to fund and support AI infrastructure build out this is an extraordinary time as you know because this is the first time in some 60 years That the computing industry is going through a fundamental platform shift From the way that software was done before to the way that it's going to be done in the future called artificial intelligence Fundamentally what's different about this industry and this way of doing computing is that the computer is now part of the infrastructure Like electricity like the internet and so you have to think about it like its infrastructure and build it out accordingly Every company will be powered by it every country will build it and so we're talking about a extraordinarily Significant infrastructure build this is with a very hefty price tag It's a hefty price tag each gigawatt is something like 50 60 billion dollars and so there's there's energy involved There's land power and shell involved and of course there's a computing part of it This is of course also a milestone for our company We used to build chips that we sell and and these are technology components that people buy and use But now and videos AI factory platform is really an investable asset and infrastructure asset And the reason for that is because it's productive is revenue generating It is fungible it's used by just about every cloud service provider It runs every AI model it runs algorithms of all different types And so it has really broad deep Reach and off-takers. This is a really great opportunity for us to build out the infrastructure take advantage of an asset That is investable long life and productive And with the partnerships that we have here we can support a really broad ecosystem build out John, and I'll say it's very unusual to have all of you in one place most of you compete on one level or another A lot of times you work together on things too But how did this come together? How did they all come to you and David? I'll start with you on that I mean it you know jensen jensen approached us and you know we've got a deep belief And a lot of confidence in Nvidia and what they're doing We have a deep belief in the opportunity set that's ahead We like all the partners at the table have been spending a lot of time raising capital and thinking about The capital that's necessary and how we create the best access to that capital for people that need it to move things forward I think one of the things Goldman Sachs brings the tables we have an extraordinary distribution network So we obviously we bring capital but we also bring a very very unique distribution network But jensen came approached us with the idea and we said You know we'd love to talk to you about it we we have a deep belief in the direction of travel and the opportunity set Over the course of the next three five seven ten years as jensen highlighted It's a big infrastructure build and the capital markets are signaling that there's lots of capital available to support it And we're trying to find all the different ways that we as an organization and partnership with other great firms that are doing Similar things can participate in getting the capital to the right places to Extend this or accelerate this infrastructure build You know I described it before as if if I buy a GM car I might get financing from GM This is you kind of bringing other people from the outside to say these will be the partners that do this financing You know this really really if it's not in video's money that's coming up on that That's right. This is all third party independent long-term capital that all of my partners are going to go help us pull together And this is really quite an extraordinary is a phase shift in the way that people think about computing It used to be you know technology now it's infrastructure And I would say you know this is really what David has explained This is calling all precincts. Yeah, this is American exceptionalism Acceptillism and what Naviti has created over the last 33 years Coming together right now, but this is calling all precincts because really now compute is an asset class And when we think about the last hundred years the last century of water and power and utilities You know in 2026 and beyond the next decade You the US will lead this it's a global imperative, but it's a it's a US imperative And as I said before this is really all precincts coming together not just One market of equity or debt or banks, but it's all it's need it needs any and all American exceptionalism meaning that you are going to be building with an American company in video and others But this is financing that could go around the globe No doubt but but the the the depth and breadth of the US Global markets in aggregate is the envy of the world and Viti is one of the envies of the world what they've created and What you're seeing here this consortium of partners and yes, we do compete But we finance a tremendous amount together as well and in the end of the day This will this will benefit the US economy as a competitive tool for the advancement for the next decade Larry, let me get you in because you're not here around the table today But I might you get your perspective on this is this new money that's going to be spent Have you already raised this money? Is this money that you were going to be deploying into AI anyway? And it's just kind of funneling it towards certain partners Well, for the whole hi everyone jensen. Thank you. Thank you for the trust that you get in black rock We have some capital now, but we're going to be raising quite a bit more capital If jensen said each gig of what cost 50 to 60 billion dollars to build out And we're talking about in the United States alone We're going to need over 70 gigawatts of power To fuel this and then you add up everything else around the world It's it's going to be an enormous financial Opportunity as Jim was talking about American's exceptionalism It has to flow through the American capital markets because this is the biggest source of capital But the other angle that I think this is so important that we must also understand You know there's quite a bit of negativity around AI and data centers right now, but let's be clear This isn't going to be creating a huge amount of jobs You know you think about it even a hundred megawatts of a data center requires as much as three billion hours of workers And so this should be looked upon as a great growth opportunity for the United States Further and growth elsewhere in the world and most importantly We need to raise as much as fast as possible and and put this to work Because I think it's really imperative that the United States is the leader in AI in the world And I think we need to be the leader in the disbursement of this technology around the world And I think this is why this is so critical and I applaud what NVIDIA has Has done bringing all these firms together and saying we have a common goal. We need to raise 500 billion dollars Obviously, that's an unprecedented amount of money, but we're going to have to raise trillions of dollars over the coming years And I do believe this is going to be representing a fantastic investment In fact, I think it's going to be such a large investment over time You're going to see more and more allocation into this asset class Jim talked about compute as an asset class, but importantly I look at the financing of data centers This is the very beginning like what it was when I started in the mortgage back securities market in the 1970s And I look upon this as as a next future for financial engineering All right, let's Let me ask a question, Larry, David, you guys might be able to weigh in on this a little bit too, and John, I think you too. But just the idea of how much money you need to raise with this, is there enough money within the public and private markets? Do you need government money that would do it? I mean, if you could have a national highway system when you had to build that like this, it had to be government money that was spending some of this. Is there enough money in our capital markets to handle this? And is it profitable for the investors? Who wants to take a giant money and jump in? I would say first off, it's great to be here. What Jensen has built is incredible. What I would say is our markets are large, and it's one of the great strengths when we talk about America, when you look at our ability to finance $700 billion a year and automotive or a couple trillion dollars a year in housing, I think we're going to see a similar dynamic. And what is supporting it is supply and demand. So today at our companies, we've seen a sevenfold increase in demand for LLMs in the last six months. And yet, the amount of compute is not keeping up. The data centers, the power, the chips. And so what you're going to see here is people are going to begin to recognize that this is a financeable asset class. So when you think about your home, when you go to buy a house, the bank underwrite you, but they also look at the value of your home. When an airline goes to buy a plane, they look at the credit of that company, but also the plane. I think historically here, the limitation has been investors have said, oh, I only want so much exposure to this hyperscaler or maybe to this foundational model company. I think when people recognize how powerful and valuable this compute is, no matter who's using it. In the Genshin case, they've got very fungible, flexible capabilities with their GPUs and the Kuda software. So what I think is markets are going to recognize the opportunity. If the scale gets very, very big, which it is, pricing could widen out. But I think in the fullness of time, the recognition of the supply, demand, and the value of the compute is going to draw capital in. Can I just add one thing? >> Well, we'll jump here in here. Okay, let's talk about work field in particular. What are you guys are doing? >> Look, just on Brookfield in particular, we've been building out backbone infrastructure since the company started. And originally it started with enormous amounts of power. Solar, wind, gas. We moved to data centers and with Genshin, we've now been moving to compute. Both financing, but also building this compute. And we cannot build enough power, we cannot build enough compute for the demand that John's talking about. So this is not about, is there too much financing being made? It's that we can't build it fast enough. >> But the question always becomes, will the demand stay at those levels? And Genshin, you see this, you see further up than probably anybody on what's happening here. Is there a point where we can't keep up at the moment, but the demand changes? >> Like I think what's in Genshin, we'll have a really good opinion on this one. But what we're seeing in our industrial businesses is we are just scratching the surfaces in using AI and the productivity advances that it's giving us. And we don't even know how to use it yet. But the productivity advances are giving us are incredible. And this is, why this backbone is, it's laying the foundation in the world for the next evolution of business and wealth creation, is because it's so evolutionary, revolutionary that it's going to change everything we do in the world. And that's why it's so important. And that's why, with Genshin pulling capital together, I was going to start to go back to what John was talking about, is we're at a point where the situation is that there hasn't been the format for investors to invest into this. And we, David, in particular need to create the structures in Genshin's leading this to create structures because there's hundreds of trillions of dollars in the world. >> And the structures look like what? They have low financing. They basically are, you get in videos stamp of approval. Like these are customers that we're working with, that we are giving our limited supplies to. >> And the system architectures are going to be specified in such a way that when we know that they deploy it, we can continuously improve it. We can bring all kinds of fungible and flexible AI models to it. And if anything were to happen, somebody else could take it over and operate it. And so that's a very big deal. >> And that's important too, that this will be used by somebody, even if the players mentioned run out of cash at some point. >> There will always be a customer for that computing platform. And the reason for that is because as you know, and VDS architecture is fairly universally adopted. >> And once every last week, we, Jensen and us, announced a deal in Korea. He's putting up a billion dollars. We're putting up nine billion dollars. Naver is going to use the compute. And it's a system, you can now systematize that. What we need to do is take that and do it all across the world and all across companies to be able to systemize to bring more compute capacity to the market. >> Well Jensen, that brings up, and I want to get to know the margin, just a minute. >> That brings up this important question. There have been all these big numbers that have thrown around what you're doing with SK. There was a Wall Street Journal story recently that suggested you'd be backstopping financing for $250 billion for an open AI plant in Ohio potentially. That's a lot of money. It's a lot of things to carry on your balance sheet. This is not that because this is not money that Nvidia is backstopping in any way, shape, or form. >> Those two things are not that either. In the case of SK, as you know, we're one of the largest users of memories in the world. We're the largest computer company in the world. And so we use a lot of memory, and our partnership with SK is multi years, and most of that's related to memory consumption and memory partnership. And so that's the SK. With respect to OpenAI, I won't comment about rumors. However, today's partnerships is really about expanding it beyond a larger, broader set of ecosystem partners. >> But you have $200 billion in free cash flow. You've got a huge balance sheet. Is it your prerogative to say, look, we are not going to pledge our balance sheet against all of these things because you can't. Do you have other things you're doing it, and that's why you bring in outside financing partners? >> No, it's really because there's a phase shift in how we think about computing now. And my partners here have all talked about it really eloquently. This is really the first time the technology chips have become an investable asset class. This is a very big concept. It's a big concept because the computers, these systems are not like our PCs, are like our phones. These are revenue generating assets. Now they're productive. They're long lived. They're fungible. They're flexible. You can use it for all kinds of different things. And so you have the ability, you have the opportunity to support a very large ecosystem of off-takers and Nvidia devolopers and AI clouds and AI partners and enterprises all around the world. And it's incredibly revenue generating. >> Does that change how you see the investor that brings into this or how you look at it on the market? >> Well, the capital markets have always, I mean, this is in a simple form and you did it yourself when you opened and you talked about GM financing a car. The capital markets have been asset-back financing markets for a long, long time. You asked the question about capital availability. What we're doing is we're trying to find different ways to raise or to participate in raising the enormous amount of capital that's necessary to fund this infrastructure build out. And you're starting to see, in a sense, asset-based financing against this infrastructure build. That's not surprising because these are real assets. They have real value. You can put a tangible value on it. And there's a lot of capital out there. I mean, one of the things I always step back and think about is $9 trillion. When you think about the U.S. capital markets, there's $9 trillion in U.S. money market funds. There's more than $100 trillion in U.S. equities. There's a lot of capital out there. It's our job as stewards of the capital markets. It says also asset management firms that steward capital for other investors to find the best way to deploy this. And will it be a straight line? No? Will there be points? To John's point where spreads widen out and it feels like things are going too fast? Yes. So, it turns from all of these things, the ample, of course, not. There'll be winners and losers. But that's what the capital markets do. And the capital markets are pretty effective and pretty efficient at getting those things right. Dr. Marliss, let's talk a little bit about what you've been doing as the global head of digital infrastructure at KKR. You've been doing this for a long time. What's changed? What's different? And what's so important about these announcements, this memorandums of understanding? Memorandum of under-memorandums of understanding? Yes. I guess it's among you. Yes. Yes. It's changed the equation for what you've been doing for a long time. Well, thank you for having me. And this is an incredible panel of experts. And, Jensen, thank you for the partnership. We obviously building on the partnership we've established with Helix, the digital infrastructure, which is really an innovative way of building the entire stack of the value chain from power, from molecule we call it to the token, which is, I think, what we're all describing here. I think what has changed is the speed. If you think about the build out of internet over 15 years, a couple of gigawatts of power was effectively consumed in a centralized fashion. The cloud is the next evolution, 10, 15 years, maybe to be exact. Today, we're adding that much capacity on a quarterly basis, which is just incredible to think about it, which it takes a whole village to finance this. So we think about it as capital. own capability. And that's something we know really well at KKR, we've been knowing this for for quite some time, big investors in data centers and power. And I think we viewed this as a really a generational investment opportunity. I want to touch on one thing, which is, which is, I think, what John mentioned, the intrinsic value of the compute layer. So I think we're big believers that that integration is occurring, the centralization of compute and needs to move up and the fungibility of compute. Of course, Nvidia is incredible innovator, just talked about very urban earlier and rolling that out. And the efficiency of production of tokens per watt of energy consumed is a step change function, which means that compute is declining rapidly. And adoption is increasing even more rapidly. That's why price per token is down 99%, and probably collapse in two cents, which means you have to have a very efficient way to finance it, which is, I think, the parties around here, and then build that infrastructure at scale at scale, and that means time to market and innovate. What's really interesting is that AI-100s, so you would think about it that six years into it, maybe six or seven years into it, there was still a market for it. You still actually are revenue generating to Jensen's point. The utilization of those chips is very high, the price per chip is very high, and so you actually are getting revenue on that. And in that way, you can think about it as a revenue stream and you can securitize it or effectively divide that risk and sell it to investors who want to participate anywhere in that stack. And that really gets us excited about this moving upstream, but also owning the big part of the downstream. And Jensen calls it, it's the land power and shell. Jim, just a couple of weeks ago, you and Black are a couple of months ago, I should say, you and Blackstone had your own deal that you put together that was pretty similar to financing like this. I think it was $35 billion for Broadcom. How was this different? And how do you view these things? I think it's another example. What Jensen was describing a few minutes ago, this whole ecosystem with compute and GPUs being a financial asset you could actually fund in finance, I think those are coming into the mainstream. And I think as we've all around the table have been doing this for three and four decades, the constant evolution of capitalism. And David's right, there will be excesses, there will be pullbacks. But what I think is different right now in 26 is in the past, we've thought about these things being financed either through the equity market or maybe the narrow market or private credit. As I said earlier, this is a calling all precincts any and all, but what we've seen is in the equity market, people don't mind having concentrated bets. By the fact we're bringing more of an ecosystem and a variety of MOUs, it allows the concentration concerns about one company or one counterparty. What Jensen described is the value between not only in the company, but actually facility, that's also going to bring in more dollars around the globe. So we're at a point in time right now, not only is the global industrial renaissance at a peak, but also we have a situation, we have more global folks who need long-term, long-duration retirement solutions. So whether that's done institutionally or globally or however it is, that's going to be the key to bringing this all together. So David, let me ask you one question on this though, we did have Steve Weisman of the Big Short fame, who was on Squawk Box just about a week and a half ago. He came in and said, look, the AI trade is the entire market at this point. He said that could be a great thing or it could be a bad thing, but he said, wherever you look, there are growth and it's not just the chip stocks, it's not just the hyper-scalers, it is not just the infrastructure companies that are doing all of this. He says it's the banks because they're financing so much of this too. Is he right? He said, look, it could be a really wonderful thing or it could be a little concerning because of just the concentration at this point. Do you agree with him on that or do you see other places in the economy right now that are driving? Well, let's step back. Across the S&P, earnings growth in the S&P has been excellent across the S&P. One of the things in my colleague John Waldron was on, I think it was on Squawk earlier this week and he was talking about momentum and early earnings growth. And so you've had really strong earnings growth across the S&P. There are a lot of things that are fueling the market. The economy is in very, very good shape. Is there a lot that's coming out of this enormous opportunity set? Absolutely. I'll go back to what I said. Whenever you have an acceleration like this that brings together in the capital markets, lots of capital, the markets don't get exactly right, but be capital allocated to things that don't work perfectly. But the capital markets also sort it out. And they sort it out relatively effectively. I'm excited about this opportunity to look forward. I'm not smart enough to tell you what's going to happen in the markets next week, next month, you know, three months from now. But when I think about three, five, seven years from now, the productivity gains in the economy, the way the U.S. is positioned in the world, the opportunity for real economic growth and acceleration of economic growth is this technology gets deployed in the economy is enormous. And we're going to see that filter through. And it won't be a straight line, but we're going to wake up a decade from now and those benefits are going to be real. And I think it's a very exciting time because of that. You know, it's our job to play a role and trying to, you know, for lack of a better term, intermediate that as either asset managers or participants in the capital markets. But there's a lot to be optimistic about when you look forward. And this is going to impact literally every single trade. And the reason for that is because at first principles, we are going through a platform shift in computing. There's not one industry, there's not one company that's not impacted fundamentally by computing. And of course, we're talking about artificial intelligence, the digitalization of intelligence. There's not one company, one industry, one person that is not affected by intelligence. And so in every single way, when you say every company, every industry is affected by the AI trade, it is not surprising. And on first principles, it makes perfect sense. >>Yeah, and there will be winners and losers. I mean, they're going to be big companies just as there have been other super technology cycles. There'll be big companies that win. There'll be big companies that turn out to be not what people expected. That's part of the capital markets. One of the things that makes the US so exceptional is that people, Americans want to invest in the market. They want to take risk. And that's one of the things that makes our capital markets so special. And so, of course, it's not going to be perfect. And there could be people on either side of the trade. But I'm looking at three, five, seven, ten years. And I'm very optimistic about what this can bring to productivity and the economy and how that ultimately will bring everybody along. >>And I would just say, you know, in Davis, right, in the end of the day, it's about revenue and cash flow. That's really what matters. And certainly Nvidia has proven that. But in our 42 years, US economy has gone from the same age. >>What are the same age? >>Three trillion to 33 trillion. I believe that growth is going to probably be accelerated the next two decades. And if you believe that, there will be winners and losers. So, Steve is right in the sense that there will be winners and losers. But this is accelerates the global economy like we've not seen. >>Hey, you're here. >>And also just one thing. >>Sure. >>If you think about a back-eat, enterprises are never early adopters. Right? Today, AI is mostly consumer-driven applications, right? Just put a prompt that comes out. In a gentege AI, I think the use cases will just be profound. And I think, as Jensen mentioned, this is not a vertical disruptor. It's a horizontal disruptor across everything. And that is really difficult to quantify. And I know that makes things a bit scary as an investor because you're trying to triangulate and risk in the scale of investment. But I mean, we're seeing in our portfolio companies and what Bruce mentioned earlier. You're seeing that payout to be really magnified as we started applying AI in the systematically and still very early stages of that. >>And because it's multi-industry. >>Exactly. >>The fact that we have a platform that is fungible by all industries, it really de-risk the investment and makes this infrastructure much more investable. >>Larry, I want to get your perspective on this too. In terms of you probably represent individual shareholders who want to get access to this too. It's been frustrating in some ways for them to get access because so many of the big companies have stayed private for so long. What does this mean? What does an opportunity like this mean for people who are looking at the retirement funds and how they get access to this? >>Well, we're going to be doing both private financing and public financing for this across the board. We're going to be working with pension funds across the world. I think the access to these types of bond issuance is going to be much larger. We're going to see a much broadening of participation. As David said, $9 trillion, the money market funds, this is going to be a very attractive opportunity to move away from a short-term money market return to a long-dated return. I look at this as a real long-term opportunity. I actually see this as also an opportunity for those who are over-invested in equities. They are going to be moving into this asset class too. This is just going to be expanding the opportunities to invest in a high credit quality investment with long-term returns. The thing that I think we can't escape, though, we need to make sure that not only this is good for America and good for our investors, we need to make sure that this is good for everybody. We need to make sure that we're broadening participation in AI. One way is investing in these AI securities. But importantly, it is important for all of us to explain why this is good for every community. This is obviously a big conversation going on in our own state, the governor put a more adoring on data centers. We need to make sure we're properly telling the story and we're telling the story and showing that this is going to be working. I'm confident we're going to be able to show that this is working for more and more men and women in the trades. But we need to make sure that we're showing why this is not just a good investment opportunity, but it's a good opportunity for all of Americans. Back yeah, I would just say a couple of things. I agree strongly with what Larry has said. You know, there's all this negativity around AI and yet we're going to have a blue collar job boom coming from that. We're going to see advances in healthcare that people cannot imagine. I know you spend a lot of time in this area, but what AI can do with visualization and looking at collating different information, pulling it together, it's going to radically change outcomes. It's going to make all sorts of individuals able to become entrepreneurs. It's critical for American national defense. There are all these things that have value. I'd also point out I don't think it's a coincidence. Most of us here spend our time in private capital, because to build this out the first few years, there's no income. Once this gets stabilized, once these are yield-based products, then it's easier to sell them in the public markets. But having this robust private market here is super helpful. And then ultimately a lot of this will migrate. And by the way, we've seen in the evolution companies here that didn't have great credit. You know, you look at a core weave which Jensenbacked early on. We did a bunch of financings. Today, their cost of borrowing has come down dramatically as they've gone public. As anthropic and open AI get public, their cost of funding will come down. It starts with our private capital, which all of us are accessing. Then we go to the public markets, and then this virtual cycle goes. I agree, not everything's going to work out, but this is powerful what it's going to mean for society and certainly markets. The one thing I would just end with is that the power is what drives all of this. The access to energy. Yes, the access to energy. And we need to build more faster. And there is a financing system for power. Like it's not new what Jensen's doing with compute. It will get to where power is there is. But it physically has to get bitten. Underwritten, like we have 14 nuclear plants that were in various stages of construction today. And it will be another 40 with another 100 coming. Oh, we're going to get them done. This is the first time in a long time that market driven forces can build out the sustainable energy necessary around the world. This is without government funding. This is all market driven. We're building these ourselves and they're going to get built all across the United States. And remember, we bought West Riverside of bankruptcy seven years ago. Nobody was building a new nuclear plant. And there's going to there's a renaissance going on today in the United States led by Westinghouse that is incredible. Largely because it's carbon free, it's base load, and it's the next energy that's coming. Like today, today, you're everyone's worried about today. But if they knew there was more coming, that's why it takes five years to build a plant. But if you know it's coming, you can consume more of your margin of safety of energy. So are these concerns about whether we can meet this demand over, over done at this point? Do you think, Jensen, that from where you see things, the demand level and how we're building up around it, that it's going to be okay, it'll all work out. We're going to be constrained for some time and pretty much across the board, from chips to memories to packaging to systems, photonics, connectors, land, power, construction workers, the whole thing, the entire supply chain up and down, behind me upstream, all the way downstream. And this is happening at a time when AI has become useful, because it's starting to do productive work and it's happening all over the world. And AI tokens are profitable, incredibly profitable. When you have something profitable, everybody wants to make more of it. Great demand, great profitability, the conditions are exactly right for what the work that we're doing right now. Jensen, why these companies? And did you go to any partners who said no? No one said no, but this is the sixth premier, world's premier institutional financiers for infrastructure. This is the best of the best. What Jensen said that right now you'll be less likely to have public capital that comes into this because a lot of these are companies that aren't making money yet. Is he right on that, or are there going to be big banks and others that kind of step up? I believe within months you're going to realize that these companies are extremely profitable. These are the fastest growing technology companies in history. Your customer's name. That's right. These are fastest growing technology companies in history and the tokens they're generating are incredibly profitable. If the wafer that we buy from TSMC are incredibly profitable, there's incredible demand for it. I'm going to want to buy a lot more. By the way, who are we talking about? Your customers? Which customers will have access to this? AI labs. AI labs. That's the ones that you think are profitable. But will this buy? AI labs. AI startups. As you know, this last six months, the world put in about $500 billion in AI startups. $500 billion is the largest investing period, probably in recent history. These companies need compute. We now have the vehicle to do so. When will we see the first deals? Well, it's up to these guys. We've got a really hustle. It's funny in the hopper. It's up to the industry. I think there's plenty of hopper. The demand's not the issue. Now we've got to hustle and get all of our agreements done. Okay. Well, folks, I want to thank you very much. All of you for joining us today. This is very big news. It's the first time we've had the opportunity to sit down with a group of people who are actually the money, the financing behind these deals. And Johnson, to get your insights to what's happening with this too, you sit in the next few months. You think that we will see that these companies are profitable. The AI labs. Well, when they go public, it's going to be the biggest IPOs in history. Well, we appreciate all of your time today. Thank you and Larry. Thank you for joining us remotely. We really appreciate your time today, gentlemen. Thank you. Thank you. Thank you. Thanks. Thanks, Becky. All right, folks. We will be back in just a few minutes. We've got fast money coming up in just a little bit after this. But we'll be back with some highlights of what happened with the markets after this. Closing bell over time. We'll be right back. Welcome back. Nvidia is teaming up with Wall Street's largest financial firms on a $500 billion push to fund AI infrastructure projects. Among those firms, Apollo, Blackstone, BlackRock, and Goldman Sachs as well as KKR and Brookfield. Let's bring in CNBC's Leslie Picker for more on context on the sort of capital raising side of this Leslie. How it fits in with what's already going on? Yeah. What's your top line thought on that? You're right, Mike. And that was a fantastic interview that Becky Quick just did with all of the major players here. So this appears to be a little different. And I think the way that Jonathan Gray of Blackstone described it, this idea that compute is going to be recognized as a financialized asset class really hits at the heart of this. This isn't direct financing like we've seen in the past with regard to data centers. Most of these funds, most of these firms already have infrastructure funds that's doing this in a really big way. But they're thinking about their relationship with Nvidia, the way that they can financialize things that haven't been financialized in the past, things like compute and chips in a really big way. So that $500 billion number is massive, half a trillion dollars. But according to the release, it's memorandum of understanding that we're talking about here. So these are not locked in deals at this point in time. That's just kind of a headline figure, a target. And the deals will come now that this arrangement has essentially been set forth. Right. And Larry think of BlackRock talked about pension funds and how essentially this is sort of through the fixed income channels the way to think about it, perhaps asset-based or asset-backed debt is really what's going on. But maybe as more of a, look, we stand ready to raise this amount through this kind of consortium, whether that means just pulling investors in ad hoc or just raising new funds to do it. I guess the big question is whether the market will take this as, well, to whatever degree we were concerned about incremental financing risk, this probably pulls against that worry. Yeah, and this could be a bit of a stretch, but in my mind, it seems almost analogous to like an aircraft leasing service where it's a little bit off balance sheet, it's a little bit more, you know, less risky upfront at least. Another interesting thing, you know, that they were talking about that Jonathan Gray mentioned was the fact that the major players in this are not necessarily the big balance sheet banks. They're mostly private capital players. Goldman Sachs, of course, is a big player in the private markets, although it gets lumped in with its peers in the big banking space as well. But, you know, the fact that a lot of the customers that they're expecting here to be, you know, cash loan negative or not have as good of credit in the beginning, but over time they expect the cost of borrowing to go down more dramatically and expect it to meet more of a public product, but the fact that the first few years they expected to be more private capital is why you see those players in particular being pulled in here. Another interesting thing is he said that, you know, they didn't have anyone say no to this project that everyone said yes. Yeah, certainly probably probably reassuring. We'll see who else maybe wishes they got in. Leslie, really appreciate the prospect. Thank you very much. That is going to do it for over time. Fast money begins right after this quick break.