Todd Boehly of Eldridge Capital is among the corporate debt managers overseeing assets for HM2, Sohn Hearts & Minds fixed income fund. He is also the billionaire financier and owner of Chelsea football club in the UK.
He says the world’s largest tech companies, or hyperscalers, will have to figure out how to finance the build out of artificial intelligence.
“The Mag seven, and their $US25 trillion of market cap, are really motivated to figure out how to do this because if they’re not on the cutting edge, they might be dying,” he said on a private credit panel at Sohn Hearts & Mind conference.
“You’ve got a lot of companies that, yesterday at least, were raising money at $7 billion to $8 billion valuations and they didn’t have access to credit... You can have a business that’s worth that much, and they can’t borrow $200 million.”
Boehly pointed out that a “staggering” 70 per cent of the cost of building a centre goes to Nvidia, which will motivate the company to facilitate financing solutions so it can keep selling chips.
He says there will be winners and losers for AI, and that will create a challenge for financiers.
“You’re going to have to [identify] the moat and how is the business protected, and what is its reason for existing in a world where you’re going to have agents doing services for people at scale. We’re just in the early innings to what that’s going to look like.”
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