Asset management company Ares CEO: Avoiding AI chip financing due to business complexity.

Ares Management Corp. is steering clear of financing the high-performance processors that run advanced AI models, instead investing in the data centers that house those chips. The asset manager is concerned that investing in GPUs could leave it stuck with assets facing obsolescence shortly after they come to market, according to a person familiar with the matter, who asked not to be identified because the information isn't public. "Frankly, the data center project due diligence is simpler, and the relative returns are very attractive," Chief Executive Officer Michael Arougheti said Thursday on an analyst call, referring to data center financing versus GPU chip financing. He added that this isn't a rejection of the GPU financing business, but that investment opportunities in data centers and supporting power infrastructure are more attractive to them. Arougheti said the data center financing market is enormous in size, while the capital available to deploy is relatively limited. The firm estimates that AI-related capital expenditure demand is about $5 trillion, of which roughly $2 trillion is for physical AI facilities and supporting infrastructure construction, and $3 trillion is for purchasing GPU chips. Arougheti said on the earnings call that he cannot conduct due diligence assessments of the value decay and depreciation curves of this type of technology. "At least at this stage, we choose to go deep in the half of the market we know best and where we have the deepest accumulated capabilities," he said.