Onchain lending protocol USD.AI approves $500 million loan for Australian AI startup

USD.AI, an onchain lending and stablecoin effort, has approved a $500 million loan facility for Sharon AI, an Australian AI infrastructure provider, to help the company expand its GPU deployments. 

"Sharon AI is precisely the type of partner USD.AI was built for – well capitalized with operational expertise and public market discipline, but unwilling to let growth be constrained by slower-moving, legacy financial rails,” Conor Moore, co-founder of Permian Labs, the firm behind the USD.AI protocol, said in a statement. 

USD.AI is a relatively new protocol designed to finance the expansion of capital-intensive AI projects. The protocol is essentially an onchain bank for AI startups that are shut out from the traditional banking system. 

According to the press release on Thursday, USD.AI has already approved more than $1.2 billion in guidance and non-recourse facilities for AI infrastructure operators, including for QumulusAI and Quantum Solutions. USD.AI “isolates risk at the infrastructure level” by only lending against “verified GPU assets,” which are then tokenized.

In other words, borrowers pledge their GPUs as collateral, and onchain representation of those physical assets “establishes a clear linkage between deployed infrastructure and on-chain liquidity.”

The protocol also deploys a dual-token model, like other onchain lenders, based around its USDai stablecoin and yield-bearing sUSDai counterpart, which can be staked.

“We are excited to have partnered with such an innovative financier in USD.AI,” Sharon AI co-founder James Manning said. “Their approach to GPU financing is market leading, and we look forward to further deployments with them as we accelerate our compute infrastructure to service hyperscale, research, enterprise and government customers in Australia and Asia-Pacific.”

Sharon AI plans to begin drawing on its loan facility this quarter to fund $65 million in initial GPU deployments, according to the announcement.