> For the complete documentation index, see [llms.txt](https://docs.usd.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usd.ai/borrower/overview.md). # Overview USD.AI provides non-recourse GPU-backed loans for AI infrastructure operators. Finance NVIDIA B200, B300, GB200, GB300 and Vera Rubin (VR200), and AMD MI455X and MI430X servers at competitive rates. USD.AI provides institutional-grade GPU financing for neoclouds and AI infrastructure operators. The full loan process, from purchase order through funding, hardware delivery, installation, and ongoing repayment, is structured through a pre-closing flow of funds designed for security and clarity. Financing availability and parameters are determined programmatically, and funds are only released upon auditable satisfaction upon all conditions precedent. Each loan will have an applicable conformity certificate describing relevant details and evidencing relevant loan closing requirements. ### **Loan Process - Flow of Funds** From purchase order to permanent debt, every USD.AI loan moves through a structured four-phase flow of funds designed to protect all parties and ensure clean legal title at every step.
#### Phase 1 — PO Funding & Escrow Setup Before any hardware is shipped and installed, USD.AI establishes a secure funding structure, to protect both the borrower and lender throughout the transaction. Typically, USD.AI uses escrow to safely fund every loan. Wilmington Trust, National Association serves as the independent Escrow Agent, holding loan proceeds in segregated, per-loan accounts. At the moment of escrow funding, yield begins accruing on the loan, at a lower rate than the drawn rate (typically 5-7%), adequately covering carry costs of capital during the escrow period. Funds are only released once all required parties have authorized the disbursement in writing, ensuring no single party can move capital unilaterally. In some cases, borrowers who have existing net 30 terms with their OEM or who are working directly with a bridge lender may not require escrow. Where escrow is used, the borrower deposits their equity contribution directly to the Ordinary Equipment Manufacturer (OEM). The lender (GPU Finance Ltd.) then funds the escrow, which is held until hardware delivery and verification are confirmed. A digital record of the loan terms is created in a pending state before any hardware ships, ensuring all borrowing terms are documented and locked in from the outset. #### Phase 2 — Server Build & Shipping OEM builds and prepares the servers for delivery. During transit, the Bridge/OEM files a lien against the server assets, securing the lender’s interest in the hardware before it arrives at the datacenter. Lender provides a guarantee to release escrow upon successful installation and verification. #### Phase 3 — Install & Verification Servers arrive at the datacenter, and are installed, tested, and verified as operational through an independent hardware monitoring provider. The Permanent Loan Agreement is executed. The transit lien is released, and the lender simultaneously files a new permanent lien against the installed hardware, establishing clean, senior collateral rights before the escrow is closed out. #### Phase 4 — Escrow Release & Fund Routing Once all required parties have authorized the release, escrow is closed out and funds are disbursed. Net proceeds are routed either directly to the Bridge Lender or to the Borrower for direct payment, depending on the deal structure. A Debt Service Reserve Account (DSRA), approximately 10% of the gross loan amount, is retained from escrow at closing as a repayment buffer. **Net Proceeds = Gross Loan Amount – Closing Fees – DSRA Reserve** Post-closing, the bridge is fully repaid, the lender holds a permanent lien against the hardware, and the loan enters standard ongoing operations. Borrowers who fund their DSRA in USDai are eligible for a reduced interest rate. See the DSRA & Rate Compression section below. ### Pre-Closing Timeline
### Illustrative Sources & Uses at Closing
### Key Parties
PartyRole
CHIP FoundationCayman Islands Foundation Company. Parent entity of the protocol; acts as Tokenizing Agent for GPU loans and manages ecosystem partnerships that expand borrower access to hardware, financing, and infrastructure networks.
GPU Finance Ltd.Subsidiary of the CHIP Foundation. Lender of record on loans where sUSDai capital is deployed. On certain existing loans it also acts as Administrative and Collateral Agent; on other loans, it directs the applicable Agent (such as GPU Servicer LLC) as part of the lender group.
GPU Servicer LLCRules-bound administrative and collateral agent on loan series where the lenders, which may include GPU Finance Ltd. as lender of record for sUSDai, have directed it to act in that capacity (generally more recent loans). It handles the day-to-day administration and servicing of the loan and holds and enforces the security interests in the collateral for the lenders. After an Event of Default, it exercises the lenders’ remedies at the direction of the Requisite Lenders (lenders holding at least two-thirds of the loan). It can also declare the full loan due on its own, and must do so if the Requisite Lenders direct it.
USD.AI Inc.Delaware corporation. Technical and operational service provider to the Foundation; built the original protocol and provides day-to-day engineering, deal origination, and operational support.
Builds complementary solutions in support of AI infrastructure financing.
BridgeGap financing provider. Funds the purchase order period and is fully taken out upon escrow release at closing.
Independent CustodianThird escrow signatory. Provides independent oversight of the escrow release process.
OEMOriginal equipment manufacturer. Receives the borrower's equity deposit directly and builds/ships the servers.
DatacenterWarehouses and custodies the GPUs; provides power, cooling, connectivity, and security.
PayPal / Paxos Trust CompanyPayPal provides the payment infrastructure and lending currency used across USD.AI loans. Paxos Trust Company (NYDFS-regulated) ensures the currency is fully backed 1:1 by U.S. dollar deposits and short-term Treasuries, with monthly third-party attestations, giving borrowers confidence that the funds they receive and repay are stable and fully redeemable.
BorrowerBankruptcy-remote Delaware LLC SPV; sole purpose is to own the GPU collateral and borrow under the loan
Parent / OperatorOperating company that contributes the servers to the SPV and acts as Limited Guarantor
Independent ManagerThird party service provider required to consent to Material Actions taken by the SPV (ie, blocks consolidation efforts)
### Legal Structure Every USD.AI loan is supported by a complete, traditionally structured legal package. This includes: * **Loan and Security Agreement** — governs all economic terms, repayment obligations, collateral rights, and default provisions between the borrower SPV and GPU Finance Ltd. * **UCC-1 Financing Statement** — filed against the hardware assets, establishing the lender's priority security interest * **SPV LLC Agreement** — the borrower holds GPU assets through a Special Purpose Vehicle, legally separating the collateral from the borrower's broader balance sheet. * **Sale & Contribution Agreement** — formally transfers the GPU assets from the operating company into the SPV, establishing clean legal title in the entity that holds the collateral. * **Pledge Agreement** — pledges the equity interests of the borrower SPV to the lender as additional collateral, giving the lender recourse to the entire SPV if needed. * **Limited Guaranty** — the borrower's parent entity provides a limited guaranty of the loan obligations, adding a layer of recourse beyond the hardware collateral itself. * **Master Services Lien Waiver** — the datacenter operator formally acknowledges the lender's senior security interest in the hardware and waives any competing lien claims. * **Customer Services Agreement** — governs the ongoing relationship between the borrower and GPU Finance Ltd. across loan administration, SPV setup, and operational support. This infrastructure ensures that if enforcement is ever required, all legal rights are already documented, properly structured, and ready to act on. Where the loan is with a borrower in a non-US jurisdiction, the local equivalent legal tool is used where commercially feasible. ### Loan Execution Once the closing process is complete, the borrower receives loan proceeds and enters the standard repayment period. Repayments are due every 30 days in accordance with the loan terms, with a mid-teens APR and 3-year principal amortization. ### Conditions Precedent to Closing & Funding
### DSRA & Rate Compression All borrowers are required to maintain a **Debt Service Reserve Account (DSRA)** — a reserve funded at closing, sized to cover a defined number of interest payments in the event of a shortfall. Borrowers who elect to hold their DSRA in **USDai** unlock a rate compression benefit: the protocol redistributes the passive yield generated by that USDai (via the PayPal 4.5% PYUSD incentive) back into the interest rate calculation, reducing the effective borrowing cost. This mechanism is the foundation of the broader USD.AI payments vision — the more of the compute stack that settles on USDai rails, the lower the effective interest rate becomes across the network. This is the first step toward a future in which GPU financing, counterparty settlement, and end-user compute payments all operate on a single, yield-generating rail. ### In the Event of Default An Event of Default is a contract-defined event like a payment that is still unpaid when its grace period ends. The grace period is set in each loan agreement. Default interest is charged on the whole outstanding balance from the day after the missed payment, and some deals also require written notice before a default becomes official. An Event of Default applies to every loan the borrower has under the facility. A voluntary insolvency filing by the borrower or its parent is an immediate Event of Default. Loss of the customer contract or the data center contract is also an Event of Default, unless the parent gives a full guaranty and lines up a replacement customer acceptable to the lenders within the agreed window. Once an Event of Default occurs, the borrower immediately loses the right to use its Reserve and Collection Accounts, and all cash is paid to lenders through the payment waterfall. The Agent notifies the lenders, and the Requisite Lenders (lenders holding at least two-thirds of the loan), or the lender in single-lender deals, direct the Agent’s remedies: * **Taking control of the bank accounts**, by notice to each bank, after which the bank follows only the Agent’s instructions. * **Stepping into the data center and customer contracts**, so offtake payments are directed to the Agent. * **Taking control of the SPV**, by enforcing the parent’s pledge of its equity. Acceleration: the Agent can declare the full loan due on its own, and must do so if the Requisite Lenders direct it. USD.AI does not aim to own or operate GPU clusters. If the servers and customer contract are sound, the Agent brings in a replacement operator and the customer’s payments keep repaying lenders. Otherwise, the Agent first tries to sell the SPV as a whole, accepting only offers that repay lenders in full. If that fails, the servers are sold individually through ITAD firms. Where a deal includes residual value protection on the servers, it may cover part of a shortfall on a server sale. ### In the Event of Borrower Bankruptcy A voluntary bankruptcy filing by the borrower or its parent is an immediate Event of Default; a filing made against them by someone else becomes one if it isn’t dismissed within a set period. The loan is non-recourse to the parent except under its limited guaranty, which covers losses caused by "bad acts," including a voluntary bankruptcy filing. ### Getting Started Borrowing via USD.AI is not publicly available. Reach out to the USD.AI team through the following if you would like to inquire or get more information: 1. Visit [**Borrow**](https://usd.ai/borrow) to review the borrower overview and submit an [initial inquiry](https://usd.ai/contact). 2. The USD.AI team will conduct preliminary diligence on your business, assets, and legal structure, including the Compute IQ underwriting assessment of the operator, offtaker and offtake contract. 3. Upon approval, loan terms are presented and the four-phase closing process begins. If you have any questions, please reach out to . {% hint style="info" %} Ready to move forward? [Apply to borrow](https://app.usd.ai/borrow). For common questions, read the [borrower FAQ](/borrower/faq.md). {% endhint %} \ *Note: earlier iterations of the USD.AI design leveraged warehouse receipts in lieu of loan NFTs for asset tokenization. In all cases, bankruptcy remote SPVs are used to ensure asset isolation from parent, and financial loan terms are established via smart contract logic.* \
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