The billionaire 'Bond King' just compared Wall Street's $500 billion AI bet to a warehouse full of bananas

In mid-August, chipmaking giant Nvidia announced a $500 billion effort to jointly finance the AI boom alongside Wall Street's biggest investment banks, but not everyone is a fan of this development.

Jeff Gundlach, the founder and CEO of Los Angeles-based DoubleLine Capital, was skeptical about the $500 billion fund, saying it "will not likely age well" in a post on X . He second-guessed the group's logic in employing "assets of unknown life" as collateral in the financial arrangement.

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Then Gundlach took it a step further and compared it to issuing asset-backed securities that were guaranteed by bananas. "Why not do a 30 year ABS deal backed by warehouses of bananas? It's OK, they'll be newly engineered bananas of unknown life," he added.

Nvidia didn't immediately respond to a request for comment from Moneywise.

On Aug. 10, Nvidia CEO Jensen Huang announced the deal with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. It's designed to muster a staggering amount of capital in service of building out the data centers, servers and cooling systems underpinning the AI boom and standardizing its financing.