PayPal (PYPL) is extending the role of its PYUSD stablecoin into artificial intelligence finance, tying it to an on-chain financing mechanism developed by USD.AI, a stablecoin protocol that provides credit to artificial intelligence companies.
According to an announcement shared with CoinDesk on Thursday, loans issued by USD.AI for graphics processing units (GPUs), data centers and related artificial intelligence infrastructure will be denominated in PYUSD, and borrowers can deposit the proceeds directly into their PayPal accounts.
The approach is designed to combine familiar payments workflows with programmable settlement suitable for long-term financing, leasing and emerging agent-driven transactions. It also shows how stablecoins can be used as settlement tools in capital-intensive industries outside of cryptocurrencies.
Stablecoins provide a way to move large amounts of funds quickly and transparently while supporting automated payment logic tied to usage or contracts.
The move comes amid surge in demand for artificial intelligence infrastructure. Morgan Stanley estimates that global spending on artificial intelligence computing may reach $6.7 trillion by 2029, putting pressure on traditional capital markets and payment systems. UBS said in May that capital spending on artificial intelligence would be about $360 billion this year.
To encourage adoption, PayPal and the USD.AI Foundation plan to launch a one-year customer incentive program, offering a 4.5% interest rate on deposits of up to $1 billion starting in early January.
USD.AI secures over $650 million in compute-backed on-chain assets, turning GPUs into tokenized collateral.
