Wall Street just borrowed $500 billion to build AI — here's what it could mean for your 401(k)

Wall Street just borrowed $500 billion to build AI — here's what it could mean for your 401(k)

Kit Pulliam

Wed, August 12, 2026 at 8:15 PM GMT+3 5 min read

• NVDA +2.99%

The AI industry just got even more expensive.

NVIDIA just announced a new partnership with six financial institutions that would provide the chip company with $500 billion in third-party capital to put toward AI infrastructure.

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"We began by building chips. Today, we are helping create a new class of productive, investable infrastructure: AI factories," said Jensen Huang, CEO and founder of NVIDIA, in the company's press release. "We are bringing the world's leading long-term capital providers together to independently underwrite AI infrastructure."

AI companies have been pursuing aggressive growth recently, and it's showing in their capital expenditures. Alphabet and Amazon are both forecasting capex in the hundreds of billions of dollars, while Tesla is expecting to more than double its capex this year.

"We should be spending on capex as fast as we can spend, as fast as we can without it being too wasteful," Tesla CEO Elon Musk said during a recent earnings call. "It's OK to be a little less capital efficient if we get things done sooner."

But will all this spending pay off for AI companies? And how does this spending impact your portfolio's bottom line? Here's what to know.

$500B deal comes as AI grows increasingly unpopular

Much of this massive spending — including NVIDIA's $500 billion deal — is going toward building data centers that AI companies need to expand their operations. Proponents say these data centers will bring more jobs for Americans, especially in the skilled trades.

"Together, we can help deliver the compute capacity that companies need to grow and create more jobs, supporting the continued growth of the US and global economies," CEO of BlackRock Larry Fink said about his company's part in the NVIDIA deal in NVIDIA's press release.

But while building data centers can employ plenty of construction workers, those jobs are temporary. And data centers generally don't create many long-term positions once they're built.

"Most data centers, you know, they employ about 100 to 200 people," Kartik Hosanagar, codirector of the Wharton Business School's AI research center, told NPR. "In fact, when Apple created a $1 billion data center in North Carolina, the news stories reported that there were less than 100 permanent jobs created as a result."

That, along with data centers' economic impacts on local communities, has contributed to growing frustration. According to a Gallup poll, more than 70% of Americans oppose local construction of AI data centers. Almost half said they strongly opposed it.

In response, some politicians are starting to crack down on data center projects. New York Gov. Kathy Hochul recently put a one-year moratorium on large-scale data center construction in the state, while Virginia Gov. Abigail Spanberger — whose state contains one of the biggest collections of data centers in the U.S. — recently signed a statewide energy consumption tax on data centers.

All this could complicate AI companies' plans to build infrastructure quickly.

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You might be overinvested in AI

These AI moves might make a bigger impact on your 401(k) than you think if you're invested in an index fund like the S&P 500.

Bloomberg estimates that AI-related companies now make up over half of the S&P 500 Index by weight — a huge increase compared to even a few years ago.

For now, that's a good thing. AI is still outperforming other parts of the S&P . But if the AI bubble bursts, it could impact your portfolio more than you're prepared for.

You can fix this by diversifying your retirement portfolio so that fewer of your investments are tied up in AI or tech stocks.

There are several ways you could do this, including investing in low-risk bonds, countercyclical assets like low-income housing or even in precious metals. How you approach diversification will depend on your individual needs and risk tolerance.

Regardless, it's a good idea to check your retirement account and make sure you're not over-invested in AI — especially if you're bearish on the field as a whole. That way, you won't be taken by surprise no matter what happens.

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This article originally appeared on Moneywise.com under the title: Wall Street just borrowed $500 billion to build AI — here's what it could mean for your 401(k)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.