Davis Polk partner Kailash Gupta was quoted in Creditflux discussing the multiple financing agreements for graphics processing unit (GPU) chips – the vital equipment that sits inside data centers.

The article noted that providing financing for GPU chips has become a massive effort and many in the market say these newer chip financing deals are becoming their own asset class. 

Discussing how these chip financing deals are structured, Kailash said, “There are deals where residual guarantees are provided by the chip makers. Then there are other deals that involve credit support or guarantees from a neocloud parent entity that is not the end user of the chips.”

“Lastly, there are deals where the chips are tied to long-term customer contracts, and the lenders may feel more comfortable lending against the contracts rather than the uncertain value of the chips. In those deals, the credit quality of the customer in the contract is very important,” he added.

“Al financing creates a new asset class,” Creditflux (October 2026) (subscription required)

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