AMD to backstop $300 million Crusoe loan, The Information reports

Feb 19 (Reuters) - Advanced Micro Devices AMD.O is set to provide a $300 million loan guarantee for cloud computing startup Crusoe to buy and deploy its AI chips, The Information reported on Thursday, following in the footsteps of rival AI giant Nvidia NVDA.O.

AMD backstopped the deal by offering to lease back its own chips from Crusoe if the startup is unable to secure customers such as AI developers, The Information said, citing people with knowledge of the deal.

The loan from Goldman Sachs will be backed by the chips and related equipment, the report said. The AMD backstop allowed Crusoe to lock in an interest rate of around 6% for the loan, much lower than the rate it would have secured otherwise.

Crusoe is installing AMD chips in an Ohio data center that is being built by 5C, a Canadian developer backed by Brookfield, according to the report.

Crusoe declined to comment while AMD did not immediately respond when contacted by Reuters.

Startup Crusoe is among a crop of companies that are building cloud computing services specifically for AI companies. CEO Chase Lochmiller last year told Reuters that it was planning to buy $400 million of AMD's new chips.

Nvidia has struck a series of deals with AI startups, including investments in some of its major customers, stoking Wall Street concerns about an emerging AI bubble with so-called circular deals.

Launched in 2018 as a cryptocurrency business, Crusoe has pivoted to building artificial intelligence infrastructure and is among the upcoming "neoclouds" that provide specialized AI cloud and data-center services.