Nvidia was rising early Tuesday. The chip maker's plan to line up $500 billion in financing for its customers is getting a tentative thumbs-up from shareholders, including Cathie Wood's ARK Invest which is scooping up shares.

Nvidia stock was up 1.6% at $220.94 in premarket trading.

Shares fell 2.9% on Monday, when the company unveiled a memorandum of understanding with a raft of Wall Street firms to make half a trillion dollars worth of capital available for artificial-intelligence companies to invest in Nvidia hardware.

The logic behind the move is clear. Nvidia has looked to ease financing bottlenecks by making investments across the AI ecosystem, especially in smaller companies which rely on its chips. But Nvidia's balance sheet has its limits, so it is bringing in outside investors to unlock a lot more funding for its customers.

"Nvidia remains almost the sole supplier of infrastructure for non hyperscale/frontier model datacenter builds. We see this fund as another mechanism that likely supports Nvidia's leadership and growth away from hyperscalers," wrote Wedbush analyst Matt Bryson as a research note.

On the face of it, the arrangement also reduces the risk to Nvidia by keeping such deals off its own balance sheet. However, investors might want to pay close attention to Nvidia CEO Jensen Huang's statement that the company could provide guarantees for certain investments.

"In some cases, Nvidia may provide a residual-value support mechanism for up to 25% of an opportunity, assessed carefully on a project-by-project basis," Huang wrote on social-media platform X. "That support is limited, residual-value based and designed to complement -- not replace -- independent underwriting."

Although it's not clear exactly what such a "support mechanism" would entail, it suggests Huang isn't averse to extending Nvidia's balance sheet a bit more. That might come on top of reported talks for Nvidia to guarantee up to $250 billion for OpenAI's lease and debt for a massive data center in Ohio.

On the flip side, some investors will be cheered to see Nvidia is working hard to keep its key position in the AI race. That looks to be the position of Cathie Wood, CEO and chief investment officer of ARK Invest, who bought a total of 122,422 Nvidia shares for various ARK exchange-traded funds on Monday.