00:00This is a platform, but what form will the borrowing take or what forms?
00:07Yes, so the real specifics of it is still relatively unclear. The commitment is 500
00:14billion, and I guess that will be termed out over a series of different transactions. But
00:19it's not the first. I mean, it's definitely the largest to date in debt financing,
00:24debt financing world when it comes to private capital firms. But I mean, it's symptomatic
00:28of a broader push to connect the kind of people leading the AI transformation and the kind
00:37of like new form of Wall Street in the form of private capital firms.
00:41Silas, talk about the novelty of this deal. And to me, it's that they're going to use
00:45compute power as collateral here. A lot of confidence on Jensen Huang's part that that
00:50will be attractive to investors. Certainly it was to the heads of these six firms. But
00:55that is something new as we venture into this AI world.
00:59Yeah, I mean, look, I remember the I'm old enough to remember the glory days when when
01:04a billion dollar private credit deal was considered large. And now and now that now they're striking
01:09500 billion transactions. Yeah, look, I mean, I mean, in terms of a kind of assurance of faith
01:15from investors, I mean, Jensen Huang has managed to generate interest from the sort of, I guess,
01:20the creme de la creme of Wall Street firms, the six that you listed, listed ahead. And I think
01:27presumably, you know, it's obviously, obviously a very strong statement from both NVIDIA and
01:32the six, the six firms, six firms, six firms listed.
01:38I was speaking with Matt Bloxham of Bloomberg Intelligence a little bit earlier, Silas, and
01:42he mentioned that this being a platform and the fact that we could have all sorts of structured
01:46products and everything from vendor financing to whatever the other side of the spectrum is
01:51going on, that this could eventually pose some kind of systemic issue. I mean, we're obviously
01:57far away from that. But is anybody talking about that?
02:01Yeah, I think people are talking about that. I mean, you know, I mean, I think, I guess,
02:05whenever a market kind of surges in the way that we're seeing this market do, I mean, people raise
02:12questions about whether or not the market is becoming, is or isn't becoming systemic. I think,
02:18you know, they've said the same about leveraged finance and, you know, high yield bonds back in
02:22the day. I think the thing to note here is that where private capital is relevant is the private
02:29capital firms that manage significant portions of insurance money that are very rating sensitive.
02:35I think you see the likes of Blackstone and Apollo and KKR move into, you know, this kind of new
02:42frontier, which is private investment grade. And that is not just straightforward corporate lending,
02:48but it can be a range of things. You mentioned vendor financing. But I mean, I mean, it can allow
02:54the clever people at these firms to have a fair old ride constructing new and innovative forms of
03:02financing. And I think we're seeing that right now. And I'm sure as details come out about the
03:07NVIDIA transaction, I think we'll see it in this deal specifically. Silas, one of these things is
03:12not like the other. That's Goldman Sachs party to this deal as well. And I'm wondering sort of what
03:16unique position it's going to have here in this deal, the role that it's going to play here
03:20and through how it sees it as useful for its business. Well, I would say that Goldman Sachs
03:26has managed to maintain a very strong foothold in private credit as well through its asset
03:30management arm. I mean, it's one of the kind of biggest, biggest hitters when it comes to when it
03:35comes to the leverage side of private credit, too. And I think I don't know. I don't know whether or
03:40not
03:40Goldman Sachs asset management businesses is involved in this. But I do know that obviously Goldman Sachs has
03:45a very strong underwriting capability and like book running capability. So I assume that any form of
03:52public financing will be will be or they'll be annoyed if they're not the lead book runner in
03:57bank transactions.
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