Ares Wary of AI Chip Financing Risks

Ares Management expresses caution regarding financing GPUs and AI chips due to depreciation risks, citing uncertainty over value decline. While estimating $5 trillion in total capital expenditure through 2030, the firm prefers investing $2 trillion in physical data centers over the $3 trillion allocated for chips, citing simpler underwriting and existing capabilities during its Oct. 29 earnings call.