On August 26, YZi Labs announced that it has made a strategic investment in USD.AI, a decentralised finance protocol designed to provide hardware-backed loans for companies building artificial intelligence infrastructure.
The move comes as demand for AI computing power is accelerating, with industry analysts estimating more than $6.7 trillion will be needed globally for infrastructure buildout over the next five years.
Addressing Capital Access Challenges
Unlike traditional financing, which often relies on long approval times and cashflow projections, USD.AI provides loans backed directly by physical AI hardware. Each loan is secured on a one-to-one basis with tangible equipment, which the company says allows borrowers to access funds in less than a week.
That approach contrasts with the 60- to 90-day approval period common among conventional credit funds, creating a potential lifeline for smaller firms that lack access to large-scale venture capital or traditional financing structures.
Reports in recent months have highlighted the gap in available funding, with a small number of technology giants securing vast sums for compute expansion while many smaller developers face limited options. Industry figures, including OpenAI chief executive Sam Altman, have called attention to the capital shortfall and proposed new funding mechanisms.
Growth and Partnerships
USD.AI has reported $62 million in total value locked on its platform and is working with firms such as K3 Capital, Concrete, Euler, and Pendle to launch so-called “AutoVaults,” designed to expand financing access for AI infrastructure providers.
The new funding from YZi Labs will support the protocol’s expansion and help onboard more developers, according to both companies. Financial details of the investment were not disclosed.
David Choi, co-founder of USD.AI, said the model was designed for builders outside traditional financial networks. “Not everyone has a CFO or Wall Street ties,” he said. “But they do have machines and projects they want to build.”
DeFi Meets AI Infrastructure
YZi Labs, which has invested in several Web3 and infrastructure-focused projects, said its support reflects a broader push to connect decentralised finance tools with real-world asset needs.
“USD.AI transforms the challenge of financing AI hardware DeFi-native yield product, aligning incentives across depositors, borrowers, and infrastructure providers,” said Dana Hou, an investment partner at YZi Labs.
Both firms positioned the partnership as part of a larger trend of linking blockchain-based financial products to physical infrastructure demands, particularly in high-growth sectors such as artificial intelligence.
