Private credit ·
Ares CEO says the firm is steering clear of GPU financing because it can't underwrite chip depreciation, favouring pre-leased data centers
On Ares Management's Oct. 29 third-quarter call, CEO Michael Arougheti said the identified AI capex need to 2030 is a little over $5 trillion: about $2 trillion for physical data center buildings and adjacent power generation and transmission, and about $3 trillion for GPUs and chips. He called the data center side "a simpler underwriting with really attractive rel val", said GPU financings "tend to be a little bit more complex" and "more concentrated", and said he does not know "how to underwrite the decline in depreciation curves on that type of technology", so "for the time being" Ares is sticking to the half of the market it understands best. Ares described its data center development as pre-let to large investment-grade hyperscale counterparties on 12 to 15 year leases. Bloomberg reported the firm is concerned it could be left holding GPUs that become obsolete soon after release.
Why it matters for deal teams: A clear underwriting line from one of the largest private-credit managers: GPU-backed loans stand or fall on residual-value and obsolescence curves, so lenders that do take chip collateral need equipment-level value tracking, not just borrower financials.
Source: Bloomberg (via Yahoo Finance); Ares Management Q3 2026 earnings call transcript (Investing.com) ↗ · more ↗