AI Financing Deal, Trane Technologies CEO, Planned California Pipeline 8/10/26

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**Brian Sullivan** (0:54)
The $500 billion opportunity in AI. Welcome to Power Lunch alongside Kelly, I, and Brian. NVIDIA and a bunch of big Wall Street firms want to turn computer power, maybe into a commodity like oil or corn. It's a massive opportunity, but is there a lot of risk there for you as well, or maybe just another reason, Kelly, to own shares of the big banks.

**Kelly Evans** (1:14)
The company cooling cutting edge technology like data centers and pharmaceuticals. They just raised full your guidance on revenue and earnings. Trane Technologies Chair and CEO, Dave Regnery is here exclusively.

**Brian Sullivan** (1:26)
All right, so we have got a big, big hour ahead, but let us start with the massive $500 billion Nvidia financing deal with six of Wall Street's biggest power brokers. In an exclusive interview yesterday afternoon, Blacklox, Larry Fink likening the current moment of financing data centers to the introduction of mortgage-backed securities in the 1970s.
Nvidia CEO Jensen Wong also saying that Nvidia's AI platform is an investible asset. And Goldman Sachs CEO David Solomon weighing in on the road to get there.

**David Solomon** (1:59)
Will it be a straight line? No. Will there be points, to John's point, where spreads widen out and it feels like things are going too fast? Yes. Will the returns from all of these things be ample? Of course not. They'll be winners and losers. But that's what the capital markets do, the capital markets are pretty effective and pretty efficient at getting those things right. All right.

**Brian Sullivan** (2:18)
So we know all of this might be a little bit confusing. What exactly does this mean? Is it turning computing power into something like I mentioned, a regular old commodity like an oil or corn or wheat? Or is it something bigger, maybe something more risky or more profitable? Let's talk about it from all angles with us to kick things off. Ed Yardeni here on set, Leslie Picker here on set, Christina Parts-Lanevales as well joining us. Leslie, I want to start with you because you've been covering Blue Owl and private credit and all these derivative products which have had a rocky 2026, I think it'd be a fair word.
What is Wall Street's early reaction to what is being perceived as a new investment class here?

**Leslie Picker** (3:02)
That's right. I think that's the right way to describe this. A lot of people have been distracted by a headline figure of $500 billion. The real news here is that they're trying to create a product, a new investible asset class, an asset backed finance class that could be akin to things we see with aircraft leasing or accounts receivables. Those are all established ABF.

**Brian Sullivan** (3:29)
A farmer grows wheat, sells against the future crop to get the cash flow. This is Nvidia transferring some of its financing. Correct me if I'm wrong.
And maybe some of that risk to Wall Street and thus maybe to our audience because ultimately I'm willing to bet these will become things that we can all just buy.

**Leslie Picker** (3:49)
So here's a way to think about it is, when you go to purchase a car, think about the car like the chips, for example, you go there, you can pay cash for the car if you want to, or you can finance the car.
And there's an established depreciation schedule for the car, you kind of know what the collateral will be, all that's been established. For chips and for compute, that hasn't been established. There are other parts of the AI infrastructure industry where you already have ABF established and data centers and other parts of the ecosystem. But in terms of chips and compute, that has not been established because the depreciation is a little wonky, people haven't necessarily wrapped their head around what future cash flows may look like. So what this does is it basically establishes the market, establishes the product, it has these six financiers who will come in and say, if you want to finance chips, you don't have to go sell tens of billions of dollars in debt in order to pay for the AI infrastructure build out, in order to pay for these chips, we'll arrange a financing plan for you. I think the big question is going to be, at what price? This is something that Jonathan Gray of Blackstone alluded to that, in the beginning, you're going to maybe deal with some cash flow negative counterparts, the pricing could be high, but over time, they expect that to come down and get more of the broader banks involved as well.