Goldman Sachs’ board has discussed a succession plan under which Waldron could replace Solomon as chief executive, potentially around the end of 2027 or in 2028, according to people familiar with the matter cited by The Wall Street Journal.

Solomon could subsequently remain at Goldman as executive chairman for one to two years, the report said.

The discussions, however, do not amount to a final decision. Goldman’s global head of communications, Tony Fratto, said the board regularly discusses succession as part of its governance responsibilities and that there was “no definitive timeline” for a change at the top.

Any assertions about the timing, he said, were speculation.

That caveat notwithstanding, the latest reports underline how far Waldron’s status has evolved. For several years, he has been widely viewed as the natural successor to Solomon.

His position was strengthened substantially in 2025 when Goldman appointed him to its board and awarded him an USD 80 million retention package designed to keep him at the firm through January 2030.

The award was made to both Solomon and Waldron and was explicitly described in Goldman’s proxy filing as part of the board’s effort to “maintain a strong succession plan for the future of the firm.”

The restricted stock units have five-year cliff vesting and are subject to continued service.

From Bear Stearns to Goldman’s inner circle
Waldron’s Goldman career began in 2000, when he joined the investment bank after working alongside Solomon at Bear Stearns. He quickly established himself as a dealmaker and was made a managing director in 2001 and a partner in 2002.

His early Goldman career included senior roles in leveraged finance and media and entertainment before he became global co-head of the Financial Sponsors Group. From 2009 to 2014, he was global head of Investment Banking Services and Client Coverage. He then became co-head of Goldman’s Investment Banking Division in 2014.

The investment-banking background is significant. Waldron helped oversee some of Goldman’s most important corporate relationships during a period when mergers, acquisitions, and underwriting remained central to the firm’s identity.

In 2018, when Solomon was preparing to take over from Lloyd Blankfein, Waldron was promoted to president and COO. Solomon said at the time that he had worked with Waldron for nearly two decades and was confident that he and other senior executives had the right combination of skills to help lead Goldman.

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Solomon specifically highlighted Waldron’s role in executing strategy, growing the client franchise, managing risk and capital, and protecting Goldman’s culture.

That partnership has endured. Waldron has consistently served as Solomon’s second-in-command during the latter’s time as CEO, providing him with a direct view of both Goldman’s strategic growth and subsequent contraction.

The man behind the succession story
Waldron graduated Phi Beta Kappa from Middlebury College in 1992 with a bachelor’s degree in English. Beyond Goldman, he has built an extensive network in international economic and policy circles.

He chairs the International Advisory Board of the Atlantic Council and serves on the executive committee of the Institute of International Finance. He is also associated with the US-China Business Council, the Council on Foreign Relations, the Aspen Economic Strategy Group, and advisory bodies connected to the China Securities Regulatory Commission and the Monetary Authority of Singapore.

His corporate and institutional roles include board positions at the Cleveland Clinic and Lincoln Center for the Performing Arts, as well as trustee positions at Middlebury College and Southern Methodist University.

Within Goldman, his remit has expanded well beyond investment banking. As president and COO, he oversees day-to-day execution, works with senior management across the firm, and co-chairs the firmwide Enterprise Risk Committee.

Goldman’s board describes him as having more than 25 years of experience across the firm, with knowledge spanning its core businesses, strategy, client relationships, and operations. It also credits him with a client-centric perspective and describes him as a champion of the bank’s culture.

Those responsibilities have put Waldron at the center of Goldman’s effort to make its businesses work more closely together under the “One Goldman Sachs” model.

The philosophy is one he has publicly championed. In a Euromoney interview, Waldron said the strategy was intended to put clients at the center of the organisation and better connect Goldman’s different capabilities. He described the cultural component as an investment in people and philosophy, built around partnership and teamwork.

More recently, Waldron has also been closely associated with the firm’s push to improve operational efficiency and deploy technology and artificial intelligence across its businesses.

Goldman’s latest annual report describes One Goldman Sachs 3.0 as an operating model using AI across areas including client onboarding, vendor management, regulatory reporting, lending, enterprise risk management, and sales enablement.

What his colleagues and peers say
Direct public commentary from Goldman colleagues about Waldron’s possible succession has been limited, unsurprising given that the bank has not formally announced a transition.

However, the recorded comments depict a senior executive who is deeply integrated into Goldman’s leadership culture.

Solomon has repeatedly spoken of Waldron as a key partner. When announcing his elevation to president and COO in 2018, Solomon said he had worked with him for nearly two decades.

Goldman’s 2018 annual report also highlighted Waldron among the senior executives surrounding the new CEO and described the leadership team as focused on keeping clients at the center of the firm.

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Waldron’s relationship with Goldman’s senior ranks was evident again when he marked 25 years at the firm in 2025. In a public post, he described Solomon’s partnership as “invaluable” and thanked colleagues and friends for their support.

Solomon responded by congratulating him and thanking him for their partnership and friendship.

Industry observers have also singled him out. Wells Fargo analyst Mike Mayo has described Goldman’s succession process as unusually telegraphed and said Waldron’s elevation had been anticipated since the retention package and board appointment.

Mayo has also praised Waldron’s accessibility.

In comments reported by Banking Dive, he said that it was only after engaging with Waldron that he had had what he considered a particularly constructive meeting at Goldman, contrasting that openness with the more limited public communication associated with some of the bank’s previous leadership.

There is also evidence of support for Waldron’s emphasis on collaboration from within Goldman.

Former senior executive Jim Esposito told Euromoney that Goldman’s senior leadership had worked together for decades and that those relationships were increasingly being developed further down the organisation.

A continuity candidate
If Waldron eventually succeeds Solomon, the transition would represent considerable continuity rather than a wholesale break with the current Goldman strategy.

Solomon became CEO in October 2018 after Blankfein’s retirement. His tenure initially involved an aggressive push into consumer banking, including the Marcus digital platform and other consumer businesses.

Goldman subsequently scaled back that strategy after the businesses generated substantial losses and refocused its resources on investment banking, trading, asset management, and wealth management.

That refocusing has coincided with a stronger period for the bank. Goldman has benefited from revived dealmaking, strong trading activity, and renewed corporate demand for capital markets services.

Reuters reported that analysts expect Waldron to maintain much of Solomon’s strategic direction, particularly the emphasis on global banking and markets and wealth and asset management.

That would make the succession less about changing Goldman’s business model and more about handing responsibility for the existing strategy to an executive who has helped design and execute it.

There is, however, a potential complication: what happens to the rest of Goldman’s senior leadership.

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Waldron’s promotion would leave the president’s position open and could trigger a reshuffling among senior executives. The Wall Street Journal has identified executives including Dan Dees, Ashok Varadhan, and Marc Nachmann as figures whose roles could be affected by the transition.

That makes succession planning more than a question of replacing one chief executive with another. Goldman will also have to manage the ambitions and retention of the executives below Waldron.

The timing is equally uncertain. Solomon, 64, became CEO in 2018, and some senior Goldman figures had expected him to complete roughly a decade in the role, potentially keeping him in place until 2028.

The reported possibility of Solomon moving to executive chairman would also allow Goldman to retain his experience during a transition while giving Waldron operational control.

For Waldron, meanwhile, the trajectory is unusually clear even if the timetable is not. He has moved from dealmaker to investment-banking chief, then to president and COO, a board director, and one of the most highly compensated executives on Wall Street.

Goldman paid him USD 38 million in 2024 and USD 45 million for 2025, according to its disclosures.

His 2025 retention award was separate from annual compensation, and the board explicitly linked it to leadership stability and succession planning.

The result is a succession story that has been developing in plain sight for years.

Goldman has not formally named Waldron as its next CEO, and it insists no timetable has been fixed. But the combination of his operating role, board seat, compensation arrangements, long relationship with Solomon, and standing across the firm has made the question less about whether he is in the succession conversation than about when the handover might occur.

For now, Goldman’s official answer remains that there is no definitive date. The latest board discussions suggest, however, that the planning for the next chapter is becoming increasingly concrete.

Image Courtesy: Goldman Sachs

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They funded the same trade bodies, signed the same comment letters, ran the same advertisements and told regulators the same story about credit, competitiveness and the cost of holding idle equity. 

That campaign has largely worked. The Federal Reserve is now finishing a rewrite of capital rules that will leave the biggest lenders holding less capital than they do today.

And that is precisely where the alliance has broken. JPMorgan, Bank of America, Goldman Sachs and Morgan Stanley are now feuding over a single technical adjustment inside the Fed’s proposal, with billions of dollars at stake, according to public documents and four people familiar with the discussions who spoke to Reuters. 

The disagreement is narrow, highly technical and almost entirely invisible to anyone outside the regulatory bar. It is also worth more to the banks involved than most of the rest of the package combined.

What the surcharge does
The instrument at the centre of the argument is the capital surcharge applied to global systemically important banks, known as GSIBs. 

There are eight of them in the United States, namely JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, BNY Mellon and State Street. 

The surcharge is an extra layer of common equity tier 1 capital they must hold on top of everyone else’s requirements, calibrated to the damage their failure would inflict on the wider system.

The Fed built the surcharge after the 2007 to 2009 financial crisis, originally around five systemic risk factors carrying equal weights of 20% each, one of which was short-term wholesale funding. 

The logic was drawn straight from the wreckage of that period. Before the crash, the largest Wall Street firms funded their balance sheets aggressively with short-term liabilities that, for several of them, disappeared almost overnight, a dynamic that accelerated the collapse of Lehman Brothers and forced Morgan Stanley and Goldman Sachs to convert into bank holding companies.

Short-term wholesale funding, or STWF, covers repurchase agreements, commercial paper, brokered and uninsured wholesale deposits and similar instruments. It is cheap, flexible and prone to vanishing at exactly the moment a bank needs it most.

The tweak that split the room
In March the Fed proposed changes it said would make the surcharge more risk-sensitive, including a revision to how short-term wholesale funding is treated. The mechanics matter here.

At present the Fed measures short-term wholesale funding as a ratio of risk-weighted assets. That normalised comparisons across the eight banks, but it also pushed the effective weighting of the funding measure to roughly 30% of the overall calculation. 

The Fed has proposed scrapping the ratio and simply measuring the absolute dollar amount of short-term wholesale funding a bank carries. 

The recalibration is designed to bring the funding component back to around 20% of aggregate Method 2 GSIB scores, its originally intended weight, with the Fed attributing the drift to early data limitations.

Strip out the jargon and the change is simple. Today a bank’s funding risk is judged relative to how risky its assets are. Under the proposal it would be judged on its own, in dollars.

That single substitution redistributes billions across the industry, because the eight banks look very different once the denominator disappears.

Winners, losers and the maths behind them
The banks that benefit are the ones with small risk-weighted asset books relative to their funding. The banks that lose are the universal lenders with enormous balance sheets that were, in effect, being flattered by a large denominator.

According to 2026 federal data, short-term wholesale funding accounted for 37% of Morgan Stanley’s liabilities and 30% of Goldman Sachs’s. For Bank of America the figure was 24%, and for JPMorgan 21%.

The scoring effects are stark. Morgan Stanley currently carries the highest funding score among the eight at 333 basis points, despite ranking only fifth in absolute terms with $503bn of short-term wholesale funding, because its comparatively small $529 billion risk-weighted asset base inflates the ratio. 

Under the proposal its score would fall to 116 basis points, a decline of 65%. JPMorgan runs by far the largest short-term wholesale funding book at $903 billion, yet ranks only fourth on the current measure at 165 basis points, because its $1.9 trillion risk-weighted asset denominator dilutes the result. 

Under the proposal JPMorgan would move to the top of the table at 208 basis points. Goldman Sachs, second highest today at 271 basis points on $552 billion of funding, would drop to 127 basis points.

Translated into capital, the numbers are large enough to explain the sudden loss of solidarity. The overall package still reduces requirements for all of them, but JPMorgan told the Fed in a June letter that the funding tweak would cost it $13 billion of additional relief it would otherwise have received, and Bank of America $9 billion. 

In the same letter JPMorgan estimated that Goldman Sachs and Morgan Stanley would each pick up a further $1 billion to $2 billion, a figure that is its own calculation of a rival’s gain rather than an independent one. 

Better Markets has reached the same directional conclusion, namely that the two investment banks stand to benefit most.

The Main Street argument
The change caught executives at JPMorgan and Bank of America by surprise, the people told Reuters, because the two largest US lenders sit on deep deposit funding and the revision hands the advantage to commercial rivals who rely more heavily on wholesale markets. 

To them it also sat awkwardly with the stated rationale for capital relief under President Donald Trump’s regulators, which has been to expand lending into the real economy.

That has become the core of their public case. According to the same account, JPMorgan and Bank of America executives have lobbied Fed officials, at times in joint meetings, to kill the proposed change, arguing that the new formula could constrain lending and support riskier trading activity instead. 

JPMorgan’s business banking chief Stevie Baron made the argument publicly in a blog post in August, warning that the proposal as drafted would encourage trading over lending to small businesses and customers.

The formal objections were filed in June. In separate comment letters submitted on June 18, JPMorgan and Bank of America told the Fed it had not adequately justified removing risk-weighted assets from the denominator, arguing the change could distort how reliance on short-term funding is measured and produce uneven outcomes across the largest US banks. 

Bank of America’s chief financial officer Alastair Borthwick wrote that a gross funding measure with no denominator risks overstating the danger posed by a larger firm whose relative reliance on such funding is low.

Bank of America has kept its public language broad. A spokesperson said the bank supports changes that drive Main Street lending, job creation and affordability. The Fed, JPMorgan, Goldman Sachs and Morgan Stanley all declined to comment.

The case for absolute dollars
The two investment banks take the opposite view, and they have the more orthodox regulatory argument on their side.

Goldman Sachs and Morgan Stanley filed their own letters backing the revision, on the grounds that it would improve the accuracy of the surcharge by better aligning the funding measure with the risk it is meant to capture. 

Goldman argued the change would produce a more transparent and economically grounded measure, while Morgan Stanley, which two of the people who spoke to Reuters described as especially active in pressing the case, told the Fed the revision could improve liquidity in the Treasury market by cutting the capital banks must hold against dealing in government bonds.

Financial reform advocates, who agree with almost nothing else in the Fed’s package, agree with them on this point. 

Better Markets argues that the damage a funding run inflicts depends on the absolute dollar volume of run-prone liabilities, not their ratio to a risk-weighted figure, since a bank forced into a fire sale must liquidate real assets at real prices regardless of what risk weights those assets carried. 

The group also notes that scaling by risk-weighted assets creates a perverse incentive, because banks that successfully optimise their risk weights downwards see their funding scores rise, while banks that become genuinely riskier see them fall.

Christopher Appel, director of banking policy at Better Markets and a Fed official from 2019 until March, said the surcharge is a key remaining safeguard as regulators trim overall capital levels and that the revision would better gauge funding risk. 

“It’s absolutely critical that the Fed get this right,” he said. Appel was among many staff who left the central bank this year as the administration overhauled federal agencies.

The wider package
The funding dispute sits inside a far larger rewrite. On March 19, the agencies released a linked set of proposals covering Basel III implementation, a revised standardised approach and the GSIB surcharge methodology, marking a decisive retreat from the 2023 drafts that would have pushed capital requirements sharply higher across the industry. 

Fed Vice Chair for Supervision Michelle Bowman set out the logic a week earlier, saying the Basel III element would raise requirements slightly for the largest banks while the surcharge proposal would produce a modest decrease, leaving a small net reduction.

The surcharge proposal does several other things beyond the funding measure. It adjusts the fixed systemic indicator coefficients to account for economic growth and inflation, replaces year-end snapshots with daily and monthly averages, and narrows the Method 2 surcharge bands from 50 basis points to 10 basis points to soften the cliff effects of moving between buckets. 

Industry economists have long complained that fixed denominators calibrated to 2012 and 2013 activity levels cause Method 2 scores to drift upwards over time for reasons unconnected to systemic risk, with a bank holding a constant global market share seeing its size score rise by 29% over the period.

The aggregate figures are substantial. The surcharge proposal alone is expected to cut common equity tier 1 requirements for GSIBs by roughly 3.8%. Taken together, the March package is estimated to reduce required CET1 by up to 4.8% for Category I and II GSIB organisations, 5.2% for Category III and IV regional banks and 7.8% for community banks.

Not everyone at the Fed agreed. Governor Michael Barr put the surcharge cut at $33 billion and said that once the recent changes to the enhanced supplementary leverage ratio are included, tier 1 requirements for GSIBs fall by 6.0%, or $60 billion. 

“These significant reductions in capital requirements are unnecessary and unwise,” he said, while accepting that some elements, including annual averaging and narrower scoring bands, were genuine improvements.

Why the banks still object
It is worth noting that even the banks winning relief are unhappy with the headline outcome. Jamie Dimon told shareholders in April that the proposals remain flawed in specific areas and that some aspects are, in his words, nonsensical, while backing timely finalisation because everyone wants to move on. 

On JPMorgan’s first-quarter call, executives said the bank was planning for a surcharge of 5.2% in 2028, a 70-basis point increase on the current 4.5%, which combined with the Basel III risk-weighted asset changes would mean roughly $20 billion more GSIB capital on its present balance sheet.

That is the frame JPMorgan has adopted throughout. It is not arguing that the surcharge should disappear. 

It is arguing that the calibration remains disconnected from the Fed’s own stated rationale, and that the funding tweak makes the disconnection worse.

The timing explains much of the urgency. The infighting risks complicating the Fed’s effort to finalise the reforms before 2027, when Democrats are widely expected to take the House of Representatives and step up scrutiny of the administration’s regulators.

Access has not been the constraint. JPMorgan and Morgan Stanley executives have each met Fed officials on the GSIB proposal at least four times since March, according to public Fed memos reviewed by Reuters. 

The four people cited by the agency said it was unclear who will prevail. Bowman has told banks to limit their feedback, and three of them believe she will stay close to the current draft, partly because she wants the rule done by year-end.

All four banks support the overhaul in principle. What has changed is that a rare window has opened to maximise individual gains at a rival’s expense. 

The industry pushed for years to soften the surcharge with limited success, and only made progress when the Fed’s 2022 capital review triggered an unprecedented and unified backlash. Unity was the tactic that worked. It has not survived contact with the spoils.

What to watch
Three things will determine how this lands. The first is whether the Fed keeps the absolute-dollar measure intact, softens it with a partial denominator, or phases it in. 

A compromise that preserves the principle while smoothing the distributional effect is the most likely landing zone for a regulator trying to close a file before the calendar turns.

The second is the Treasury market question. Morgan Stanley’s argument that lower capital charges on repo activity would deepen liquidity in government bonds is the one strand of this dispute with consequences well beyond bank shareholders, and it is the argument most likely to resonate inside a central bank that has spent years worrying about Treasury market fragility.

The third is durability. Better Markets has pointed out an internal tension in the package, arguing that if risk-weighted assets cannot be trusted as a denominator for the funding measure, the accompanying Basel III proposal doubles down on the same metric across the rest of the capital framework. 

A rule finalised in December on a narrow supervisory majority, into a Congress about to change hands, is not obviously a settled rule.

For now, the spectacle is the story. Four of the most powerful financial institutions in the world spent a decade arguing that capital regulation was too blunt to reflect real risk. 

The Fed has finally accepted a version of that argument, and two of them have discovered they preferred the blunt version after all.

The post Wall Street’s capital truce collapses over one line in Fed rulebook appeared first on International Finance.

So were Blackstone president Jon Gray, Apollo president Jim Zelter and Brookfield chief executive Bruce Flatt. KKR sent Waldemar Szlezak, who runs its digital infrastructure business. Larry Fink of BlackRock joined by video link from the road.

The segment ran for more than half an hour and contained remarkably little detail. What it contained instead was a message, delivered with the theatrical confidence that has become Huang’s trademark.

Nvidia had signed memorandums of understanding (MoU) with all six firms to create what it called independent compute financing platforms, with the aim of mobilising more than $500 billion of third-party capital for the construction of AI data centres and the purchase of Nvidia hardware.

No deals had actually been signed. There is no fixed timetable. The USD 500 billion figure, as Bloomberg later reported, is a round number combining transactions already under discussion with a forecast of demand still to come. Each lender will vet borrowers individually before committing a cent.

And yet the announcement may prove to be one of the most consequential financial events of the AI era. Because what Huang was really doing was not raising money. He was proposing a new asset class.

The problem nobody could keep paying for

To understand why Nvidia needed to stand on a stage with six financiers, look at what has happened to the balance sheets of its biggest customers.

For most of the last decade, Big Tech funded its own expansion. Cloud businesses threw off enormous operating cash flow, and capital spending, however large, stayed comfortably inside it. That relationship has now broken.

Alphabet, Amazon, Meta and Microsoft have collectively guided to something close to USD 700 billion of capital expenditure in 2026, a rise of roughly three quarters on the previous year’s already record figure.

Bank of America projects aggregate hyperscaler capex will top USD 860 billion this year and approach USD 1.2 trillion in 2027. Goldman Sachs now models more than USD 5 trillion of combined capex for the big four between fiscal 2025 and fiscal 2030.

The cash consequences arrived faster than most investors expected. Alphabet posted its first negative free cash flow quarter since its 2004 listing in the second quarter of 2026, burning USD 5.9 billion as capital spending surged past USD 44 billion in three months.

It then raised the top end of its full year capex guidance by as much as USD 15 billion. Amazon’s trailing 12-month free cash flow swung to negative USD 7.6 billion after three consecutive positive years.

Research house Epoch AI, fitting growth curves to quarterly filings, calculated that aggregate hyperscaler cash capex would overtake operating cash flow somewhere around the third quarter of 2026. That crossover point is now behind us.

Microsoft remains the outlier, the only one of the American hyperscalers still generating meaningful free cash flow, and it has managed that partly by leasing rather than buying, adding some USD 26 billion of finance lease assets over four quarters rather than issuing senior bonds.

The rest have gone shopping for outside money, and at extraordinary scale. FactSet calculates that incremental annual debt has risen from 9% of hyperscaler capex in fiscal 2024 to 32% by mid-2026.

Equity has returned to the funding mix too. Alphabet priced an USD 84.75 billion raise in June 2026, the largest equity capital transaction ever completed by a listed company, including a USD 10 billion private placement with Berkshire Hathaway.

Oracle, the most leveraged of the group, raised USD 43 billion of debt and USD 5 billion of equity in fiscal 2026 and plans roughly USD 40 billion more.

Then there is the arithmetic that hangs over the whole sector. Morgan Stanley’s widely circulated estimate puts global data centre capital expenditure through 2028 at around USD 2.9 trillion, against hyperscaler operating cash flow capable of covering perhaps USD 1.4 trillion of it.

The remaining USD 1.5 trillion has to come from somewhere else. In Morgan Stanley’s own bridge, the largest single share, about $800 billion, is allocated to private credit, with roughly USD 200 billion from corporate bonds and USD 150 billion from securitised products.

That USD 1.5 trillion hole is the reason six financiers were sitting in a television studio in August.

Why Nvidia cannot simply write the cheque

Nvidia is not short of money. It reported record revenue of USD 81.6 billion in the first quarter of fiscal 2027, up 85% year on year, with data centre revenue of USD 75.2 billion and gross margins around 75%.

It has authorised a further USD 80 billion of share buybacks and raised its dividend 25-fold. Its market capitalisation sits around USD 5.5 trillion.

But Huang has said publicly that AI infrastructure spending could reach USD 3 trillion to USD 4 trillion a year by the end of the decade. At that scale, no single corporate balance sheet is adequate, including his own.

There is a second problem, and it is arguably more urgent. Nvidia’s growth increasingly depends on customers who are not hyperscalers. Frontier laboratories such as OpenAI and Anthropic, specialist AI clouds, sovereign projects and enterprises want compute at scale, but many of them lack the credit rating or the cash to buy millions of dollars of silicon outright.

Meanwhile the hyperscalers, Nvidia’s traditional customers, are busy designing their own accelerators. Broadening the buyer base is a strategic necessity, and the constraint on that broadening is no longer chip supply or data centre shells. It is financing.

Nvidia’s earlier attempts to solve this itself produced exactly the reaction it feared. The company has invested in customers including CoreWeave, contributed billions to an OpenAI funding round, and joined a consortium backing xAI. Analysts began describing the pattern as circular financing, the vendor funding its own demand, and comparisons to the telecom vendors’ financing collapse of the dot com era followed quickly.

The reaction sharpened when reports emerged that Nvidia was weighing a USD 250 billion guarantee for an OpenAI data centre project in Ohio. Nvidia shares fell 5%, and the price of credit default swaps on Nvidia bonds recorded their largest intraday move since they began trading actively. The company subsequently trimmed that guarantee to under USD 120 billion, covering only the first phase.

Seen against that background, the six-way partnership is a deliberate correction. Nvidia will still provide credit support, but Huang clarified after the announcement that its guarantees would cover as much as 25% of an opportunity, assessed project by project.

The other 75%, and the origination, structuring, distribution and warehousing of the risk, belongs to Wall Street. The chipmaker keeps the demand and sheds most of the balance sheet.

The intellectual move at the centre of the deal

Huang’s contention is that a rack of Nvidia GPUs should be treated the way a lender treats a warehouse, a toll road or a power station.

In his framing, Nvidia compute is an investable infrastructure asset, productive, revenue generating and fungible across the entire market.

Nvidia’s own statement described its compute as broadly adopted, transferable between customers and operators, and continuously improved by CUDA software updates that extend its useful life.

If that classification holds, everything else follows. Loans can be secured against the hardware itself alongside the offtake agreements that guarantee its use. Special purpose vehicles can own chips and lease them to Nvidia’s customers, keeping the debt off the customer’s balance sheet and off Nvidia’s.

Those vehicles can then issue bonds, some expected to run to tens of billions of dollars each. If a borrower fails, the chips can be re-rented to somebody else, which limits the damage from any single default. Insurance capital, pension money and sovereign wealth funds can buy the resulting paper, because it looks and behaves like infrastructure debt.

If the classification does not hold, the whole edifice is a very large pile of fast depreciating electronics dressed up as real estate.

The case against

An H100 that changed hands for roughly $30,000 in 2023 was trading at around $8,000 by the middle of 2026, a fall of about 73% in three years. Hourly rental rates for the same chip peaked near USD 8, collapsed to between USD 1 and USD 2 as supply arrived, recovered, then softened again.

CUDA’s ecosystem of more than six million developers may guarantee that a buyer exists for repossessed hardware. It does not guarantee the price.

Michael Burry, who made his name calling the last credit crisis, has attacked the depreciation schedules underpinning the sector, arguing that a two-to-three-year hardware upgrade cycle cannot support five- and six-year useful life assumptions, and estimating that understated depreciation could distort reported earnings by around USD 176 billion between 2026 and 2028.

Accounting specialists have pushed back on the strongest version of that claim, but the debate has moved from technical footnotes to the front of investor decks.

Then there is China. Bernstein Research expects Nvidia’s share of the Chinese AI chip market to collapse from roughly 40% to around 8% by the end of 2026, with Huawei approaching half the market. Should Chinese production flood the world with cheap compute, the collateral behind these loans could erode faster than the loans amortise.

One analyst estimate suggests investors will price GPUs as high depreciation equipment rather than property, and demand yields of 11% to 17% depending on their position in the capital structure. That is high yield pricing, and it sits well above what a hyperscaler pays in the corporate bond market.

Rating agency methodology for GPU backed securitisations, meanwhile, is still being worked out. Fitch has yet to publish a settled approach.

What Wall Street actually gets

Fees, and a lot of them. Alternative managers earn management fees on committed capital, typically 1.5% to 2%, plus carried interest on profits. Fee related earnings are what analysts prize, because they are recurring and predictable.

Apollo reported record fee related earnings of USD 785 million in the second quarter of 2026, up 25% year on year, on USD 74 billion of originations. Strikingly, that figure excluded the USD 35 billion Broadcom AI infrastructure financing entirely, because Apollo books volume at closing rather than announcement, leaving roughly USD 50 billion of signed deals to feed later quarters.

Management has also noted a shift towards structures that recognise fees across multiple quarters or years rather than upfront, smoothing earnings in a way public shareholders reward. Goldman, the only participant with a full investment banking apparatus, collects the underwriting and distribution economics on top.

A home for permanent capital. The deeper motivation is a liability problem. The five largest listed alternative managers now oversee about USD 1.5 trillion of perpetual capital, roughly 40% of their combined assets, much of its insurance and annuity money gathered through platforms such as Apollo’s Athene, KKR’s Global Atlantic and Blackstone’s insurance mandates.

Annuity liabilities are long dated and require long dated, contracted, investment grade style assets to match them. Those assets are scarce. A twelve-year lease on a GPU cluster with an investment grade offtaker attached is, in principle, exactly the instrument these balance sheets are hungry for.

Apollo’s private credit assets alone stand at roughly USD 405 billion, Blackstone’s credit and insurance arm at about USD 465 billion, BlackRock at around USD 220 billion after its HPS and GIP acquisitions, and KKR at about USD 140 billion. All of that money needs somewhere to go.

Ownership of a new market at its inception. Asset classes are created rarely. Whoever writes the first documentation, sets the advance rates, defines the residual value assumptions and builds the ratings dialogue tends to own the league tables for a decade.

Data centre securitisation issuance ran near USD 27 billion in 2025 and is projected by JPMorgan at USD 30 billion to USD 40 billion annually in 2026 and 2027, a rising share of the combined asset backed and commercial mortgage-backed market.

CoreWeave has already priced an USD 8.5 billion investment grade rated GPU collateralised transaction. Nvidia has now handed six firms a franchise position in the market that follows.

Better risk for the same yield. Nvidia’s willingness to backstop up to a quarter of a transaction materially changes the credit maths. A lender writing a loan against hardware alone is exposed to residual value.

A lender writing the same loan with a first loss cushion from a company with 75% gross margins and a $5.5 trillion market capitalisation is in a different business. Combine that with collateral that mixes the chips themselves with contracted offtake, and with the ability to re-rent hardware to a different tenant on default, and the risk adjusted return starts to look attractive even at spreads well inside 11%.

Distribution, which is where the real prize sits. These firms do not intend to hold the paper. They intend to originate it and sell it. Executives are already sounding out sovereign wealth funds, pension schemes and insurers, and indicated during the announcement that some of the capital could come from retail investors.

That last point matters more than it sounds. American regulators have recently opened the roughly $13 trillion defined contribution market to private credit managers, while Europe’s revised ELTIF regime has broadened what long term investment funds may hold.

Non traded business development companies and evergreen vehicles are growing quickly. A manufacturing line for long dated, contracted, AI linked credit feeding those channels is a business with obvious compounding characteristics.

Apollo is expanding a trading operation to sell down chunks of what it originates and make markets in the paper afterwards, which adds a second fee layer.

Adjacency. The financing will not be a single product. As Mercer’s global head of real assets observed after the announcement, the partnerships are likely to spawn strategies across infrastructure, real estate credit and possibly private equity, giving investors multiple access routes. Data centres need land, power, transmission, cooling and construction finance. A firm that anchors the compute layer is well placed to sell the rest.

Competitive necessity. Nobody wanted to be left out. Huang has said he approached only these six and none refused. Within minutes of the announcement, Morgan Stanley published a framework to facilitate USD 1.5 trillion of funding for American innovation and national security, with AI and advanced computing at the top of the list.

JPMorgan’s asset management arm is reportedly discussing how to participate. Broadcom set the template weeks earlier, tapping Apollo and Blackstone as anchor investors for more than 20 gigawatts of compute for frontier laboratories through 2028, with USD 35 billion already committed and the borrowing structured to sit off Broadcom’s balance sheet.

Where the win-win could break

The mutuality depends on one assumption holding for a decade. Chips must remain productive long enough, and generate enough revenue, to service the debt raised against them.

Apollo’s own published view illustrates the tension. The firm has argued that more than $5 trillion of expected data centre capital expenditure implies USD 1.5 trillion to USD 2 trillion of annual AI revenue by 2030, against USD 40 billion to USD 60 billion today. That is the gap the entire structure is betting will close.

The risk is no longer confined to technology shareholders. It now runs through special purpose vehicles, private credit originators, securitisation trusts and ultimately into pension portfolios and insurance reserves.

Insurance regulators have already tightened capital treatment for collateralised loan obligations and overhauled how collateral loans are charged, moving from a flat charge to a framework tied to what actually backs the loan.

American law firms are circulating client alerts on litigation risk in AI data centre financing. The Federal Reserve Bank of Chicago has noted that direct bank exposure to AI adjacent industries averages under 1% of assets, while cautioning that indirect exposure through lending to private credit funds is harder to see.

One person close to the announcement described Huang’s intention as building a debt shopfront, an advertisement aimed simultaneously at customers and at nervous investors. If the deals do not materialise as promised, or if they sour, the reputational cost lands on all seven names.

The final take

Nvidia has done something clever. It has kept the demand, capped its exposure at roughly a quarter, and persuaded the deepest pools of capital in the world to carry the rest.

Wall Street, for its part, has been handed a manufacturing line for exactly the kind of long dated, contracted, high yielding asset its insurance balance sheets and retail distribution channels have been starved of.

Both sides get what they want. Whether the arrangement is a win for the pensioners and policyholders who end up owning the paper depends entirely on a question none of the seven firms on that stage could answer, which is how long a graphics processor stays valuable.

The post How Nvidia turned its chips into Wall Street’s newest asset class appeared first on International Finance.

“We are in a period of rapid technological change, but we know our people are still this firm’s greatest asset. Hiring exceptional talent is central to how we adapt and grow,” said David Solomon, chairman and CEO of Goldman Sachs, during the facility’s launch.

“The Pacific North-west is home to many of the world’s top engineering schools and a deep pool of talent. Opening in Bellevue reflects our long-term commitment to attracting and developing technologists who want to work with the best and lead our industry through this next phase of change,” he added further.

The new dedicated space gives Goldman Sachs a permanent footprint in one of the world’s leading technology hubs and serves as a strategic presence to accelerate its firmwide AI and cloud transformation.

The location, as per Goldman, will also provide it access to a deep pool of engineering talent and a strong pipeline of graduates from leading universities, with expertise across cloud, AI and other emerging technologies.

Goldman Sachs employs over 12,000 engineers, representing roughly one-quarter of the firm’s global workforce, who play a critical role in developing the technologies that power its businesses.

“As technology and AI continue to transform the financial industry, the firm has remained at the forefront of equipping its engineers with advanced tools and platforms that help drive innovation, enhance productivity, and support clients,” the Wall Street giant noted.

The newly inaugurated Bellevue office also expands Goldman Sachs’ network of engineering hubs and complements the firm’s presence since 2001 in downtown Seattle, housing employees across the firm’s banking and wealth management businesses.

This investment builds on the firm’s growth across the globe into locations including Dallas, Salt Lake City and Warsaw.

“The space features an open floor plan designed to foster collaboration, productivity and client service alongside wellness amenities, underscoring Goldman Sachs’ commitment to providing a modern workplace experience that supports the well-being of its workforce,” the business concluded.

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The long-awaited final Chinese regulatory approval for the business could be granted around ‌the time of Chinese President Xi Jinping’s planned visit to Washington to meet with his American counterpart Donald Trump, reported Reuters.

The American bank, which offers corporate, institutional, and other banking services in China, in 2021, applied for a wholly-owned mainland Chinese brokerage unit licence as part of its push to ramp up its presence in the world’s second-largest economy.

“Citi, which has been hiring for the business over the last couple of years in preparation for the licence, aims to roughly double the headcount to around 100 people by the end of this year,” stated Reuters, while citing a source.

The ⁠regulatory approval from Beijing, if it happens this month, would see Citi competing with Wall Street rivals including JPMorgan, Goldman Sachs, and Morgan Stanley for a share of growing and increasingly profitable onshore securities trading and underwriting deals in the world’s second-largest economy.

Citi’s aggressive attempt to establish a solid presence in China’s brokerage market comes at a time when the Asian giant is witnessing a growing list of technology and other companies tapping domestic equity markets for fundraising and attracting increased fund flows into the stock markets.

Wall Street giants, irrespective of the growing Sino-US geopolitical rivalry, have been expanding in the world’s second-largest economy.

The Xi Jinping administration also sees the growing access of American firms to its financial sector as a mean to attract more capital inflows.

As part of its China expansion, Citigroup will be adding personnel, including senior front-office bankers and support staff. Reports indicate that Citi will achieve this through a mix via a combination of internal transfers and external hires.

For the China brokerage unit, Citi also plans to relocate some of its bankers from Hong Kong and other Asian markets, apart from moving some of its existing mainland staff to the new business.

Citi’s American rivals are already gaining significantly in China. In 2025, profits at the wholly-owned ‌China securities ⁠unit of Goldman Sachs nearly tripled to 1.46 billion yuan (USD 217.39 million), while JPMorgan’s almost quadrupled to 984 million yuan. Morgan Stanley’s profit, on the other hand, soared sevenfold to 138 million yuan.

All three banks benefitted from surging securities trading revenue primarily from institutional clients.

Citi’s new China business unit will reportedly be seeking a regulatory nod to conduct A-share brokerage, underwriting, research, and principal trading businesses in the onshore market.

As per the sources, those offerings would complement the Wall Street giant’s existing offshore-focused team for investment banking in China that supports domestic companies’ financing activities in overseas markets.

The ⁠bank also plans to lean on its onshore corporate and commercial banking client base, which it already serves in areas such as foreign exchange, cash management, and trade finance, to win A-share equity and M&A mandates.

Citi’s new China unit will focus on sectors including technology, healthcare, and consumer and financial institutions, targeting the Asian giant’s established corporate “champions” as well as emerging players including AI and chip companies.

Citi would be entering a hyper-competitive domain, where, in addition to its Wall Street rivals, Chinese brokerages also introduce new offerings rapidly.
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The group, which was first announced in October 2025 when just 10 banks were ⁠involved, also eyes expanding into stablecoins pegged to other G7 currencies, with the euro emerging as the top priority.

Stablecoins, which are used to move money around the world in the form of cryptocurrency, have seen a revival in interest, especially after the rebound in crypto prices in 2024.

United States President Donald Trump’s support for the sector has further sparked the idea of using blockchain in the mainstream financial system.

The financial group will compete with a separate consortium of 37 financial institutions, which formed ‌a ⁠company called Qivalis, with the latter planning to launch a euro-pegged stablecoin later this year.

The post Goldman Sachs, BofA-led consortium plans 2027 stablecoin launch appeared first on International Finance.

The figure, which spans dividends and share buybacks across the continent’s largest lenders and insurers, would mark the highest annual payout on record for the sector, extending a run of ever-larger distributions that began once regulators lifted pandemic-era restrictions on capital returns.

It builds on a string of already-record years, with combined payouts having climbed steadily from roughly 50 billion euros for banks alone in 2024 to a far broader and larger pool this year as insurers and diversified financial groups joined the wave.

The scale of the payouts reflects a profound shift in the fortunes of European lenders, which spent more than a decade trading at depressed valuations after the global financial crisis. Higher interest rates through 2023 and 2024 boosted net interest margins, while a subsequent pivot toward fee income from wealth and asset management has made many banks less dependent on rate cycles than before.

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The company reported preliminary quarterly revenue of more than USD 11.5 billion, compared with USD 787 million a year earlier and USD 4.73 billion in the first quarter of 2026, according to documents seen by Bloomberg News.

The post Anthropic revenue surges ahead of IPO as company eyes Decart AI acquisition appeared first on International Finance.

The chipmaker said it had struck partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to create “compute financing platforms” aimed at funding data centres, AI factories and other infrastructure required to support the rapid expansion of AI.

The USD 500 billion is not committed funding or money that has already changed hands. It represents the potential amount the platforms could mobilise over time, with the companies having signed memorandums of understanding and final agreements still to be concluded.

At the heart of the initiative is Nvidia’s attempt to establish its graphics processing units (GPUs) as an investable asset class. The company argues that its chips are widely used, transferable and capable of generating predictable economic returns, allowing lenders to provide financing against the hardware.

“In AI, compute is revenue,” Nvidia chief executive Jensen Huang said, describing computing capacity as a critical form of infrastructure.

Goldman Sachs said its role would include creating a market for credit backed by Nvidia compute, effectively allowing the chips to serve as collateral for loans.

The move comes as technology companies pour unprecedented sums into AI. Major Nvidia customers, including Microsoft, Amazon, Google, Meta, OpenAI and Anthropic, have collectively spent more than USD 1 trillion on AI projects and infrastructure over the past three years, with spending expected to rise further.

The new financing could help AI companies and cloud operators build more data centres and acquire the chips needed to power increasingly demanding models and services.

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NEOS is a specialized provider of systematic options-based income exchange-traded funds (ETFs). As one of the fastest-growing ETF platforms, the entity manages USD 30 billion in assets across 19 options-based income ETFs as of June 30, 2026.

Through this acquisition, Goldman Sachs Asset Management expands its offering of sophisticated derivative-based ETF solutions to help meet the growing demand and broad range of global portfolio needs for investors and advisors.

Founded in 2022, NEOS has emerged as a pioneer in next-generation options-based ETF solutions that seek to provide high monthly income, tax efficiency, and diversification.

“As investor demand for active ETFs grows, NEOS’ disciplined investment approach is highly complementary to our capabilities across buffer, managed outcome, and income strategies. Together, we will give investors a diverse toolkit for different market environments,” said David Solomon, Chairman and CEO of Goldman Sachs.

“NEOS’ innovative ETF solutions and intuitive financial education programs have helped them build a strong market presence across a diverse investor base, and this acquisition is an excellent strategic and cultural fit,” he added further.

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