NVIDIA Corporation (NVDA.US) entered talks with insurers to discuss sharing the risks of loans backed by its chips as collateral, Financial Times, citing sources, reported. Nvidia proposed various structural arrangements to insurers to transfer part of the risk of capital-intensive semiconductor financing to insurers and other investors.

One of the proposed structures would provide insurance for loans extended to emerging cloud computing companies, sources divulged. If these companies default and the resale value of NVIDIA chips pledged as collateral is insufficient to repay lenders, the insurance would provide compensation.

Nvidia's approach shows the company is leveraging Wall Street, private capital and the insurance industry to explore different financing structures to help broaden the customer base purchasing its chips.

Nvidia CEO Jensen Huang previously said chips should be viewed as an "investable asset class" similar to other expensive and durable technology equipment such as aircraft, which support sophisticated financial structures that transfer risks and costs between users and investors.
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AASTOCKS Financial News
Website: www.aastocks.com

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