Chips as Collateral: GPU-Backed Lending
A GPU is not a building. It is a fast-decaying claim on compute demand, and its value is scheduled by someone else's roadmap. When you lend against chips, you are not really lending against metal — you are lending against a rental rate that the next generation will cut. The discipline is brutally simple: make the loan amortize faster than the asset economically decays. Every failure in this business is a version of the same mistake — a depreciation curve drawn flatter than reality, so the collateral quietly falls below the balance in the years when the hardware is oldest, slowest, and least wanted.
Knowledge check
Why is a stretched useful-life assumption on accelerators a warning sign rather than a neutral accounting choice?
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Because a longer assumed life shrinks the annual depreciation charge, which simultaneously inflates reported margins and props up the carried book value that supports the collateral coverage on the debt. Both the operator and its lenders benefit from the optimistic number, so a stretched life can flatter earnings and collateral at once while the asset's real economic value decays faster underneath.