PayPal (PYPL) is extending the role of its PYUSD stablecoin into artificial intelligence finance, linking it to onchain funding mechanisms developed by USD.AI, a stablecoin protocol that provides credit to AI companies.

Loans issued by USD.AI to finance graphics processing unit (GPUs), data centers and related AI infrastructure will be denominated in PYUSD, with borrowers able to receive proceeds directly into PayPal accounts, according to an announcement shared with CoinDesk on Thursday.

The approach is intended to combine familiar payment workflows with programmable settlement suited to long-term financing, rentals and emerging agent-driven transactions. It also demonstrates how stablecoins can be used as settlement instruments for capital-intensive industries beyond crypto.

Stablecoins provide a way to move large sums of capital quickly and transparently while supporting automated payment logic tied to usage or contracts.

The move comes as demand for AI infrastructure surges. Morgan Stanley estimates global AI compute spending could reach $6.7 trillion by 2029, putting pressure on traditional capital markets and payment systems. This year, capital expenditure for AI will be about $360 billion, UBS said in May.

To encourage adoption, PayPal and the USD.AI Foundation plan to introduce a one-year customer-incentive program offering 4.5% on up to $1 billion in deposits beginning in early January.

USD.AI secures more than $650 million in onchain, compute-backed assets, turning GPUs into tokenized collateral.