Glossary / finance terms

GPU depreciated amount

A scheduled reduction in the value of financed GPUs used in a loan-to-cost test, so the maximum debt falls as the hardware ages.

Randeep Bubbra | Lawyer | Making the next generation of infrastructure financeableUpdated 26 October 2026Professional profile ↗

How it works

The GPU depreciated amount is a scheduled value for the financed GPUs that falls over time on an agreed curve. It is used in loan to cost or loan to value tests, so the maximum debt reduces as the hardware ages, whether or not market prices have fallen.

In GPU and data centre deals

This is one of the main ways GPU lenders deal with technology obsolescence. Rather than relying on a market valuation, which may be hard to obtain, the facility writes down the GPUs on a straight-line or accelerated schedule, often over four to six years. If the debt exceeds the permitted percentage of the depreciated amount, cash is swept or the borrower must prepay.

What gets negotiated

The depreciation curve: straight-line or accelerated, and over how many years
Whether market valuations can override the schedule
The test level and the consequence of failing it
Treatment of replacement or upgraded GPUs

In the filed deals

IREN's Hardware 3 financing treats loans above 65% of capital cost less the GPU Depreciated Amount as an LTC Event.

For in-house counsel