---
title: "Ares Management sizes AI spending near $5 trillion and lends on the buildings, not the $3 trillion of chips"
description: "Ares CEO Michael Arougheti says he cannot underwrite the depreciation curve on GPUs, so the $690.6 billion manager is financing AI's data centers and power instead. The chip side of the debt boom, from Broadcom's $60 billion package to CoreWeave's $51 billion stack, is being priced for exactly that risk."
publisher: "The Inference"
section: "Data Center"
published: 2026-11-02T14:12:20.214Z
modified: 2026-11-02T14:12:20.214Z
canonical: https://theinference.org/article/ares-management-sizes-ai-spending-near-5-trillion-and-lends-on-the-buildings-not-the-3-trillion-of-chips
language: en
keywords: "Private Credit, AI Debt, Data Centers, Ares Management, CoreWeave"
---

# Ares Management sizes AI spending near $5 trillion and lends on the buildings, not the $3 trillion of chips

> Ares CEO Michael Arougheti says he cannot underwrite the depreciation curve on GPUs, so the $690.6 billion manager is financing AI's data centers and power instead. The chip side of the debt boom, from Broadcom's $60 billion package to CoreWeave's $51 billion stack, is being priced for exactly that risk.

[On its October 29 earnings call](https://finance.yahoo.com/technology/ai/articles/ares-ceo-says-avoiding-backing-193819449.html), [Ares Management](https://theinference.org/markets/companies/ares-management) chief executive Michael Arougheti drew a line through the middle of the AI build [1]. The firm, which manages $690.6 billion, will finance the data centers and the power behind them, not the chips inside [1]. "It's frankly a simpler underwriting with really attractive relative value," he said [1].

## The half Ares refuses is the bigger half

Arougheti sizes AI capital spending demand near $5 trillion: about $2 trillion for buildings and adjacent infrastructure, about $3 trillion for the GPUs themselves [1]. Chips cost multiples of the buildings that house them and depreciate over five to six years, and he said he does not know "how to underwrite the decline and depreciation curves on that type of technology"; a person close to the firm says Ares fears being left holding obsolete assets [1][8]. For now, he said, Ares sticks to "the half of the market that we understand best" [1].

## Banks and Blackstone take the chip risk

The stance is not capital rationing. Ares [raised more than $31 billion of gross commitments in the quarter](https://finance.yahoo.com/markets/stocks/articles/ares-management-corporation-reports-third-100000868.html), over half of it outside credit, invested $35 billion, and lifted fee-related earnings 11% to $524.2 million as assets grew 16% year over year [2][9][3].

Someone else is writing the chip risk: banks are preparing a $42 billion senior tranche, with [Blackstone](https://theinference.org/markets/companies/blackstone) leading $18 billion of junior debt, inside [Broadcom's roughly $60 billion package for chips leased to Anthropic](https://www.moneycontrol.com/news/business/broadcom-seeks-60-billion-for-ai-chips-as-anthropic-races-to-expand-computing-power-14043293.html) [4].

[SpaceX](https://theinference.org/markets/companies/spacex), listed since June, is [in talks to borrow about $40 billion for Nvidia chips](https://www.msn.com/en-us/news/other/spacex-seeks-40-billion-financing-to-buy-nvidia-chips-sources-say/ar-AA2dLteF) in a deal led by Apollo [5]. [Morgan Stanley](https://theinference.org/markets/companies/morgan-stanley) counts [$466 billion of AI-linked debt raised in 2026 so far](https://financialpost.com/financial-times/ai-debt-worries-spark-surge-in-default-insurance-trading), against $101 billion in the same period of 2025 [7].

*Chart: **Chip-backed debt stacks up in three balance sheets** Bars comparing Broadcom's $60 billion chip financing package, CoreWeave's $51 billion of debt and obligations, and SpaceX's planned $40 billion Nvidia chip raise.*

*As reported: Broadcom's package is in syndication, CoreWeave's figure is existing debt and obligations, SpaceX's is a planned raise still in talks. Sources: Bloomberg, CNBC, Reuters. [4][6][5]*

## CoreWeave is the price tag

[CoreWeave](https://theinference.org/markets/companies/coreweave), the best known of the neoclouds renting GPUs to AI developers, [carries more than $51 billion of debt and obligations](https://www.msn.com/en-us/money/markets/coreweave-credit-default-swaps-hit-distress-levels-as-investors-sour-on-ai-debt/ar-AA2ejDri) [6]. [Its 9.75% bond due 2031 yields about 15.8%](https://theinference.org/article/ai-debt-now-has-two-prices-15-for-coreweave-6-25-for-iron-mountain), and its five-year credit default swaps traded near 1,038 basis points, past the 1,000 level [S&P Global](https://theinference.org/markets/companies/s-and-p-global)'s Gavan Nolan describes as generally indicating distress; protecting $10 million of that debt costs $1.82 million upfront [6][7].

*Chart: **CoreWeave's debt has grown almost fivefold in six quarters** Line chart of CoreWeave's total debt rising from 10.6 billion dollars in Q4 2024 to 51.6 billion dollars in Q2 2026, while quarterly revenue rose from 0.7 billion to 2.6 billion dollars.*

*Total debt and quarterly revenue, in billions of dollars, from CoreWeave's SEC filings. The 51.6 billion dollars of debt at the end of Q2 2026 is the stack the credit market is pricing at distress levels. Source: CoreWeave, quarterly figures from its SEC filings, retrieved 2 November 2026. [10]*

The worry is spreading up the credit ladder: [Oracle's insurance cost has more than doubled this year](https://theinference.org/article/iren-borrowed-363-million-against-its-gpus-as-default-insurance-on-oracle-and-spacex-hit-records), to 322 basis points [7].

*Chart: **Where GPUs are the collateral, default insurance costs 10 times more** Bars ranking five-year credit default swap spreads for CoreWeave, Oracle, SpaceX, Meta and Nvidia in mid-to-late October 2026.*

*Five-year credit default swap spreads, basis points, as quoted in mid-to-late October 2026; CoreWeave's CDS at about 1,090bp per the Financial Times. Source: FT via Financial Post. [7]*

## The other side, and who ends up holding it

CoreWeave chief executive Mike Intrator wrote that the market "misunderstands and acts irrationally," citing a backlog above $100 billion, about two-thirds of it with investment-grade customers including [Microsoft](https://theinference.org/markets/companies/microsoft) and [Meta](https://theinference.org/markets/companies/meta); Deutsche Bank calls the selloff a buying opportunity [6]. Arougheti hedged too, casting no aspersions on GPU financing and ruling it out only "for the time being" [1].

Either way the money moves: data-center and power developers gain a patient $690 billion lender, GPU clouds face a thinner, costlier pool, and the chip risk migrates to bank syndicates and the fund investors behind them.

## Syndications and IPOs will price the chip half

Watch the placements: whether [Broadcom](https://theinference.org/markets/companies/broadcom)'s $42 billion senior tranche syndicates smoothly, where [Anthropic](https://theinference.org/markets/companies/anthropic)'s IPO prices after its prospectus filing, and what CoreWeave pays at its next borrowing [2]. Ares reports in February, expecting a record fundraising year [2]. The tell is the gap in financing cost between the two halves of its $5 trillion math [2].

## Takeaway

Ares will finance AI's data centers and power, not its chips: Arougheti cannot underwrite the GPU depreciation curve, so the $3 trillion chip half moves to bank syndicates, where CoreWeave's credit already trades at distress levels.

## Sources

1. [Bloomberg via Yahoo Finance, "Ares CEO Says It's Avoiding Backing AI Chips, Citing Complexity", 29 October 2026](https://finance.yahoo.com/technology/ai/articles/ares-ceo-says-avoiding-backing-193819449.html)
2. [Ares Management Corporation press release via PR Newswire/Yahoo Finance, "Ares Management Corporation Reports Third Quarter 2026 Results", 29 October 2026](https://finance.yahoo.com/markets/stocks/articles/ares-management-corporation-reports-third-100000868.html)
3. [Zacks Equity Research via Yahoo Finance, "Ares Management Q3 Earnings Beat Estimates, AUM Rises Y/Y", 29 October 2026](https://finance.yahoo.com/markets/stocks/articles/ares-management-q3-earnings-beat-142700831.html)
4. [Bloomberg via Moneycontrol, "Broadcom seeks $60 billion for AI chips as Anthropic races to expand computing power", 2 October 2026](https://www.moneycontrol.com/news/business/broadcom-seeks-60-billion-for-ai-chips-as-anthropic-races-to-expand-computing-power-14043293.html)
5. [Reuters via MSN, "SpaceX seeks $40 billion financing to buy Nvidia chips, sources say", 7 October 2026](https://www.msn.com/en-us/news/other/spacex-seeks-40-billion-financing-to-buy-nvidia-chips-sources-say/ar-AA2dLteF)
6. [CNBC via MSN, "CoreWeave credit default swaps hit distress levels as investors sour on AI debt", 15 October 2026](https://www.msn.com/en-us/money/markets/coreweave-credit-default-swaps-hit-distress-levels-as-investors-sour-on-ai-debt/ar-AA2ejDri)
7. [Financial Times via Financial Post, "AI debt worries spark surge in default insurance trading", 20 October 2026](https://financialpost.com/financial-times/ai-debt-worries-spark-surge-in-default-insurance-trading)
8. [ai123 newshub, "Ares Management CEO Says Data Center Financing More Attractive Than GPU Funding", 2 November 2026](https://ai123.com/newshub/16760)
9. [Daily Digest Invest, "Ares raises $31 billion as investors keep pouring into alternatives", 2 November 2026](https://dailydigestinvest.com/ares-raises-31-billion-as-investors-keep-pouring-into-alternatives)
10. [CoreWeave, quarterly figures from its SEC filings, retrieved 2 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001769628)


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Ares Management sizes AI spending near $5 trillion and lends on the buildings, not the $3 trillion of chips — The Inference. Canonical: https://theinference.org/article/ares-management-sizes-ai-spending-near-5-trillion-and-lends-on-the-buildings-not-the-3-trillion-of-chips