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Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake. CoreWeave is spending $35b in CapEx in 2026. Therefore, Nvidia's investment is on

Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake. CoreWeave is spending $35b in CapEx in 2026. Therefore, Nvidia's investment is only 5.7% of CoreWeave's single year CapEx. The other $32b is coming from other sources that isn't Nvidia. This is hardly circular. Nvidia invests in Neoclouds because it's a hedge against hyperscalers having too much power, ie designing and prioritizing their own chips, and not fully using Nvidia's rack design. Neoclouds give hyperscalers competition. Neoclouds accept Nvidia investments because it allows them to secure Nvidia chips first, which is a competitive advantage since new Nvidia chips have been as much as ~5-20x more efficient than old Nvidia chips. Nvidia was planning to directly compete against hyperscalers through DGX Cloud. They cancelled public DGX Cloud access when they found that investing in Neoclouds would accomplish the same goals without having to compete against their biggest customers. If you're Nvidia, it's smart because Neoclouds that you have a large stake in will deploy your full stack from GPUs to networking to storage racks. They will share valuable usage data back to you so you can design a better next generation. Hyperscalers are likely a lot less cooperative, prefer to use their own designs if possible, and will guard their usage data.

KaoruAoiShiho 3mo ago
You're probably just responding to the headline but this person is an AI bull and isn't claiming it's a big deal, she's going into it and explaining it.
- aurareturn 3mo ago
  It's a bad headline because most of the article isn't about circular financing and it's only 5.7% of anyway.
- gyanchawdhary 3mo ago
  [dead]
- hirako2000 3mo ago
  Just the look and feel and the subscribe fixed position in particular, made me bounce.
- rapidfl 3mo ago
  People are looking for the AI bear case - so this headline gotta work better. Its not a bad idea haha. More people suspect there is some circular shenanigans but want confirmation -- so maybe this is the best way to lure them in. Come as the bear, stay for the bull. With just these 2 comments, now I'm really gonna read that article.
  - Mistletoe 3mo ago
    Can someone even outline the AI bull case? I can’t fathom one at all. https://isaiprofitable.com/ https://isaiprofitable.com/ The only profitable company is the one running the scam.
    - 27183 3mo ago
      0. Pour money on the fire 1. AI somehow becomes AGI because money implies "emergence" I guess? 2. Profit somehow?
    - lern_too_spel 3mo ago
      One sentence summary of the bull case: Anything you would have paid a human to do, you will pay an AI to do instead.
      - Zetaphor 3mo ago
        If we're all out of work then who buys the things AI makes?
        lern_too_spel 3mo ago
        All the corporations buying inputs for their products and services and all the people on unemployment.
    - oceanplexian 3mo ago
      Do you use it or is this speculation? The AI tooling I used 12-24 months ago if frozen in time, monetized correctly is probably 100x the capability of what software could do before (And software was already eating the world long before AI). The bull case is that we just invented the 21st century equivalent of the printing press or electricity. And that website is the 19th century equivalent of someone criticizing electricity as a concept because it would be expensive to build power lines. If anything it's a miracle that the US economy is so efficient that we can just skip all the small talk and bullshit and build out the infrastructure to support AI immediately.
re-thc 3mo ago
> Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake. Depends if they actually got the $2b in real money. There's a difference. It's a big deal if no money was involved. Nothing even entered the company directly. Some deals have structured with Special Purpose Vehicles where money goes to the SPV. The SPV buys GPUs with it (from Nvidia). GPUs is loaned back to the company involved. So this company is stuck with this GPU rental, which may or may not be what they want and not $2b. This sounds like a bad deal? So Nvidia had to sweeten the deal and promise min utilization on those GPUs by renting it themselves even if they don't need it. So what's income and what's expense here? That's the problem. It's inflated and messed up.
- eitally 3mo ago
  NVIDIA's $2b into CoreWeave was a stock purchase. https://investors.coreweave.com/news/news-details/2026/NVIDIA-and-CoreWeave-Strengthen-Collaboration-to-Accelerate-Buildout-of-AI-Factories/default.aspx https://investors.coreweave.com/news/news-details/2026/NVIDI...
vb-8448 3mo ago
My understanding is that it's not about the money itself but the model: - you fund a new company and sign long terms contracts with it - this new company uses the money you gave it and a lot of debt (backed by long term contracts) to build datacenters and buy a lot of GPU - your figures look great What happens when they run out of debt or funds? If they reach some kind of profitability it's not a big deal, but if not ... EDIT Forget to mention the buyback of unused capacity problem: what happens to your figures when you have to buy back tons of unused GPUs?
- marcosdumay 3mo ago
  Yes, circular financing is not by itself a problem. It being that size, lasting for that long, and the total lack of viable products created by it are the problem. Financing only adds leverage, that makes every loss or profit larger.
- philipallstar 3mo ago
  > If they reach some kind of profitability it's not a big deal, but if not ... What is the end of this sentence?
  - InsideOutSanta 3mo ago
    ... then it is a big deal.
    - philipallstar 3mo ago
      Okay, but why? What's the actual thing that will happen?
      - InsideOutSanta 3mo ago
        They made huge investment commitments based on planned revenue. They'll go bankrupt (and tear much of the economy down, given how tied up everyone is in them) if they can't keep raising money to pay for these commitments or turn huge profits.
deleted 3mo ago
[deleted]
axus 3mo ago
Billions of dollars sounds like a literal "big deal", but not necessarily "a problem". Worst case for nVidia is they lose 2 billion dollars, NBD.
didntknowyou 3mo ago
anyone can isolate one number to fit their bias. if you look at the wider financing in the industry and the context of multiple AI deals in the billions without any cold hard cash flow or reasoning it kinda makes sense
- aurareturn 3mo ago
  But we're seeing Anthropic add $15b ARR every month. They're adding 0.34 Salesforce every single month! In 3 months, they add one Salesforce business. How are we still saying there is no outside money flowing in? Demand is so great that no one has any extra capacity. And clearly, the more compute we have, the better the results. AI intelligence has not hit a ceiling yet. More compute means more training, more inference, more thinking, more verification, more multi-agent work.
vannevar 3mo ago
It sounds like Nvidia is not only supplying GPUs first to neoclouds, it is also supplying them for free if they cannot be resold: "Furthermore, in the case of CoreWeave, Nvidia has also provided a significant financial backstop against unsold GPU capacity. Under the agreement with an initial value of $6.3 billion, “in instances where [CoreWeave’s] datacenter capacity is not fully utilized by its own customers, NVIDIA is obligated to purchase the residual unsold capacity through April 13, 2032.” In other words, Nvidia is committed to purchasing unsold GPU capacity if CoreWeave is unable to find another buyer. With an initial value of $6.3 billion, there is the potential that the arrangement could become larger over time." I don't know how Nvidia is handling Coreweave GPU sales revenue in their accounting, but it sounds to me like it should have a pretty big asterisk attached to it. It's more like a consignment arrangement than an actual sale. And it obviously creates a huge incentive for Coreweave to over-order GPUs, since there's no risk (I doubt they're paying cash up front).
- ElProlactin 3mo ago
  From an accounting perspective, this absolutely isn't a consignment agreement. The sale of the GPUs by Nvidia to CoreWeave is real. CoreWeave pays Nvidia cash and becomes the owner of the asset, so it's properly booked as a sale. If it can't sell capacity, the GPUs are not returned to Nvidia. CoreWeave is using debt to make the purchases but the backstop provided by Nvidia ostensibly helps it get better loan terms. That doesn't change the accounting. If Nvidia has to purchase unused capacity, it simply becomes an operating expense for Nvidia. Nvidia's exposure is the $6.3 billion backstop obligation and the equity it holds in CoreWeave.
  - vannevar 3mo ago
    >CoreWeave is using debt to make the purchases but the backstop provided by Nvidia ostensibly helps it get better loan terms. According to the article, the $6.3B is a floor, not a ceiling. And it's not clear whether CoreWeave is actually paying cash or getting the GPUs on credit. If the full amount is getting booked, it's an accounting loophole that's being exploited. If GM sells Hertz a million cars, but says "Hey, we'll buy these back if you can't rent them," can GM book all those cars as actual revenue? What if Hertz only has to pay 10% up front and the rest in 5 years?
usumgallu 3mo ago
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xbmcuser 3mo ago
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baxtr 3mo ago
Simple answers: because it makes for a good headline.
michaelt 3mo ago
Bear in mind the last big thing from the tech industry was cryptocurrency. And that was rife with scams, chicanery, and nonexistent investments. As well as needing lots of GPU-filled power hungry data centres. So I think a lot of people are viewing the AI boom through the same lens.
- aurareturn 3mo ago
  I don't think the tech industry embraced cryptocurrency. There are a few outliers like Meta's basket of currency crypto attempt and Sam Altman's World Coin. Meanwhile, the entire tech industry has embraced LLMs one way or another.
  - michaelt 3mo ago
    Maybe not, but the cryptocurrency grifters all dressed themselves as tech visionaries. And tech venture capitalists, Altman and Musk were big boosters of cryptocurrencies. To an outsider, cryptocurrency cones from the tech industry, despite the fact Apple and Google didn’t bet big on it.
    - aurareturn 3mo ago
      Most of them were outside of the traditional San Francisco/Silicon Valley tech companies. Most of these were in Asia, New York, 2nd/3rd world countries, etc. I think any association between cryptocurrencies and AI is a lazy one.
- Der_Einzige 3mo ago
  [flagged]
  - lionkor 3mo ago
    "the real deal"? this whole framing is black and white. It can be useful and also be a complete and utter fucking scam the way it's "produced" and sold.

KaoruAoiShiho 3mo ago

You're probably just responding to the headline but this person is an AI bull and isn't claiming it's a big deal, she's going into it and explaining it.

aurareturn 3mo ago
It's a bad headline because most of the article isn't about circular financing and it's only 5.7% of anyway.
gyanchawdhary 3mo ago
[dead]
hirako2000 3mo ago
Just the look and feel and the subscribe fixed position in particular, made me bounce.
rapidfl 3mo ago
People are looking for the AI bear case - so this headline gotta work better. Its not a bad idea haha. More people suspect there is some circular shenanigans but want confirmation -- so maybe this is the best way to lure them in. Come as the bear, stay for the bull. With just these 2 comments, now I'm really gonna read that article.
- Mistletoe 3mo ago
  Can someone even outline the AI bull case? I can’t fathom one at all. https://isaiprofitable.com/ https://isaiprofitable.com/ The only profitable company is the one running the scam.
  - 27183 3mo ago
    0. Pour money on the fire 1. AI somehow becomes AGI because money implies "emergence" I guess? 2. Profit somehow?
  - lern_too_spel 3mo ago
    One sentence summary of the bull case: Anything you would have paid a human to do, you will pay an AI to do instead.
    - Zetaphor 3mo ago
      If we're all out of work then who buys the things AI makes?
      - lern_too_spel 3mo ago
        All the corporations buying inputs for their products and services and all the people on unemployment.
  - oceanplexian 3mo ago
    Do you use it or is this speculation? The AI tooling I used 12-24 months ago if frozen in time, monetized correctly is probably 100x the capability of what software could do before (And software was already eating the world long before AI). The bull case is that we just invented the 21st century equivalent of the printing press or electricity. And that website is the 19th century equivalent of someone criticizing electricity as a concept because it would be expensive to build power lines. If anything it's a miracle that the US economy is so efficient that we can just skip all the small talk and bullshit and build out the infrastructure to support AI immediately.

re-thc 3mo ago

> Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake. Depends if they actually got the $2b in real money. There's a difference. It's a big deal if no money was involved. Nothing even entered the company directly. Some deals have structured with Special Purpose Vehicles where money goes to the SPV. The SPV buys GPUs with it (from Nvidia). GPUs is loaned back to the company involved. So this company is stuck with this GPU rental, which may or may not be what they want and not $2b. This sounds like a bad deal? So Nvidia had to sweeten the deal and promise min utilization on those GPUs by renting it themselves even if they don't need it. So what's income and what's expense here? That's the problem. It's inflated and messed up.

eitally 3mo ago
NVIDIA's $2b into CoreWeave was a stock purchase. https://investors.coreweave.com/news/news-details/2026/NVIDIA-and-CoreWeave-Strengthen-Collaboration-to-Accelerate-Buildout-of-AI-Factories/default.aspx https://investors.coreweave.com/news/news-details/2026/NVIDI...

vb-8448 3mo ago

My understanding is that it's not about the money itself but the model: - you fund a new company and sign long terms contracts with it - this new company uses the money you gave it and a lot of debt (backed by long term contracts) to build datacenters and buy a lot of GPU - your figures look great What happens when they run out of debt or funds? If they reach some kind of profitability it's not a big deal, but if not ... EDIT Forget to mention the buyback of unused capacity problem: what happens to your figures when you have to buy back tons of unused GPUs?

marcosdumay 3mo ago
Yes, circular financing is not by itself a problem. It being that size, lasting for that long, and the total lack of viable products created by it are the problem. Financing only adds leverage, that makes every loss or profit larger.
philipallstar 3mo ago
> If they reach some kind of profitability it's not a big deal, but if not ... What is the end of this sentence?
- InsideOutSanta 3mo ago
  ... then it is a big deal.
  - philipallstar 3mo ago
    Okay, but why? What's the actual thing that will happen?
    - InsideOutSanta 3mo ago
      They made huge investment commitments based on planned revenue. They'll go bankrupt (and tear much of the economy down, given how tied up everyone is in them) if they can't keep raising money to pay for these commitments or turn huge profits.

deleted 3mo ago

[deleted]

axus 3mo ago

Billions of dollars sounds like a literal "big deal", but not necessarily "a problem". Worst case for nVidia is they lose 2 billion dollars, NBD.

didntknowyou 3mo ago

anyone can isolate one number to fit their bias. if you look at the wider financing in the industry and the context of multiple AI deals in the billions without any cold hard cash flow or reasoning it kinda makes sense

aurareturn 3mo ago
But we're seeing Anthropic add $15b ARR every month. They're adding 0.34 Salesforce every single month! In 3 months, they add one Salesforce business. How are we still saying there is no outside money flowing in? Demand is so great that no one has any extra capacity. And clearly, the more compute we have, the better the results. AI intelligence has not hit a ceiling yet. More compute means more training, more inference, more thinking, more verification, more multi-agent work.

vannevar 3mo ago

It sounds like Nvidia is not only supplying GPUs first to neoclouds, it is also supplying them for free if they cannot be resold: "Furthermore, in the case of CoreWeave, Nvidia has also provided a significant financial backstop against unsold GPU capacity. Under the agreement with an initial value of $6.3 billion, “in instances where [CoreWeave’s] datacenter capacity is not fully utilized by its own customers, NVIDIA is obligated to purchase the residual unsold capacity through April 13, 2032.” In other words, Nvidia is committed to purchasing unsold GPU capacity if CoreWeave is unable to find another buyer. With an initial value of $6.3 billion, there is the potential that the arrangement could become larger over time." I don't know how Nvidia is handling Coreweave GPU sales revenue in their accounting, but it sounds to me like it should have a pretty big asterisk attached to it. It's more like a consignment arrangement than an actual sale. And it obviously creates a huge incentive for Coreweave to over-order GPUs, since there's no risk (I doubt they're paying cash up front).

ElProlactin 3mo ago
From an accounting perspective, this absolutely isn't a consignment agreement. The sale of the GPUs by Nvidia to CoreWeave is real. CoreWeave pays Nvidia cash and becomes the owner of the asset, so it's properly booked as a sale. If it can't sell capacity, the GPUs are not returned to Nvidia. CoreWeave is using debt to make the purchases but the backstop provided by Nvidia ostensibly helps it get better loan terms. That doesn't change the accounting. If Nvidia has to purchase unused capacity, it simply becomes an operating expense for Nvidia. Nvidia's exposure is the $6.3 billion backstop obligation and the equity it holds in CoreWeave.
- vannevar 3mo ago
  >CoreWeave is using debt to make the purchases but the backstop provided by Nvidia ostensibly helps it get better loan terms. According to the article, the $6.3B is a floor, not a ceiling. And it's not clear whether CoreWeave is actually paying cash or getting the GPUs on credit. If the full amount is getting booked, it's an accounting loophole that's being exploited. If GM sells Hertz a million cars, but says "Hey, we'll buy these back if you can't rent them," can GM book all those cars as actual revenue? What if Hertz only has to pay 10% up front and the rest in 5 years?

usumgallu 3mo ago

[dead]

xbmcuser 3mo ago

[dead]

baxtr 3mo ago

Simple answers: because it makes for a good headline.

michaelt 3mo ago

Bear in mind the last big thing from the tech industry was cryptocurrency. And that was rife with scams, chicanery, and nonexistent investments. As well as needing lots of GPU-filled power hungry data centres. So I think a lot of people are viewing the AI boom through the same lens.

aurareturn 3mo ago
I don't think the tech industry embraced cryptocurrency. There are a few outliers like Meta's basket of currency crypto attempt and Sam Altman's World Coin. Meanwhile, the entire tech industry has embraced LLMs one way or another.
- michaelt 3mo ago
  Maybe not, but the cryptocurrency grifters all dressed themselves as tech visionaries. And tech venture capitalists, Altman and Musk were big boosters of cryptocurrencies. To an outsider, cryptocurrency cones from the tech industry, despite the fact Apple and Google didn’t bet big on it.
  - aurareturn 3mo ago
    Most of them were outside of the traditional San Francisco/Silicon Valley tech companies. Most of these were in Asia, New York, 2nd/3rd world countries, etc. I think any association between cryptocurrencies and AI is a lazy one.
Der_Einzige 3mo ago
[flagged]
- lionkor 3mo ago
  "the real deal"? this whole framing is black and white. It can be useful and also be a complete and utter fucking scam the way it's "produced" and sold.