Wall Street's largest banks are riding a lucrative new wave — bankrolling the AI gold rush. Goldman Sachs was a key facilitator in this week's artificial intelligence funding announcements from both Nvidia and Intel. These are just two of several recent high-profile wins, providing a financial windfall for the venerable investment bank.
It started Monday, when Nvidia said that Goldman and five other financial institutions would combine efforts to raise $500 billion of financing to fund the AI buildout. The revenue-generating compute infrastructure serves as the cash flow-yielding collateral for those funds, much like commercial real estate or toll roads.
Jim Cramer called the Nvidia idea, which is still a bit light on exact details on how all this would work, "monumentally positive." Hours earlier, Intel announced a $15 billion common stock offering (later upsized to $20 billion), with Goldman as a joint book-running manager.
The proceeds from the sale will help fund the expansion of Intel's foundry as it seeks more chip contract manufacturing business.
Goldman, as a joint book-running manager, captures fees across every step of these transactions. Goldman buys shares from the original issuer (Intel or Alphabet) at a discount and resells them to institutional clients.
Goldman's Global Banking & Markets division, which is the firm's largest by revenue, houses the core investment banking franchise.
AI dealmaking provides lucrative fees for Goldman, but it also binds Goldman's stock narrative to the semiconductor capital expenditure (capex) cycle.
