Wall Street just borrowed $500 billion to build AI — here’s what it could mean for your 401(k)
Kit Pulliam
Wed, August 12, 2026 at 10:45 PM GMT+5:30
5 min read
- NVDA
-0.06%
The AI industry just got even more expensive
NVIDIA just announced a new partnership with six financial institutions that would provide the chip company with $500 billion in third-party capital to put toward AI infrastructure
Must Read
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one
Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here’s what it is and 3 simple steps to fix it ASAP
Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going
“We began by building chips. Today, we are helping create a new class of productive, investable infrastructure: AI factories,” said Jensen Huang, CEO and founder of NVIDIA, in the company’s press release. “We are bringing the world’s leading long-term capital providers together to independently underwrite AI infrastructure.”
AI companies have been pursuing aggressive growth recently, and it’s showing in their capital expenditures. Alphabet and Amazon are both forecasting capex in the hundreds of billions of dollars, while Tesla is expecting to more than double its capex this year
“We should be spending on capex as fast as we can spend, as fast as we can without it being too wasteful,” Tesla CEO Elon Musk said during a recent earnings call. “It’s OK to be a little less capital efficient if we get things done sooner.”
But will all this spending pay off for AI companies? And how does this spending impact your portfolio’s bottom line? Here’s what to know
$500B deal comes as AI grows increasingly unpopular
Much of this massive spending — including NVIDIA’s $500 billion deal — is going toward building data centers that AI companies need to expand their operations. Proponents say these data centers will bring more jobs for Americans, especially in the skilled trades
“Together, we can help deliver the compute capacity that companies need to grow and create more jobs, supporting the continued growth of the US and global economies,” CEO of BlackRock Larry Fink said about his company’s part in the NVIDIA deal in NVIDIA’s press release
But while building data centers can employ plenty of construction workers, those jobs are temporary. And data centers generally don’t create many long-term positions once they’re built
“Most data centers, you know, they employ about 100 to 200 people,” Kartik Hosanagar, codirector of the Wharton Business School’s AI research center, told NPR. “In fact, when Apple created a $1 billion data center in North Carolina, the news stories reported that there were less than 100 permanent jobs created as a result.”
