Nvidia CEO Jensen Huang has forcefully rejected suggestions that the latest $2 billion investment made by the company in cloud provider CoreWeave is part of a trend of ‘circular financing’ between AI chipmakers and tech firms. As reported by Bloomberg News, Huang called the criticism ‘ridiculous’ and insisted that Nvidia’s investments represent confidence in ‘generational companies’ rather than financial engineering. “These are generational companies and the investments that we make is confidence in them,” Huang said. “But it’s a small percentage of the amount of money that they ultimately have to go raise, and so the idea that it is circular is completely ridiculous.”
CoreWeave expansion and AI factories
The latest deal made by Nvidia expands company’s previous stake in CoreWeave, with funds earmarked for land, power, and infrastructure to build AI factories. These facilities will be powered by Nvidia’s chips reinforcing the company’s central role in the AI ecosystem. Huang stressed on the fact that contributions made by Nvidia whether to CoreWeave, OpenAI, Anthropic, or Elon Musk’s xAI are only a fraction of the massive capital these firms must raise. He noted that OpenAI has committed to spend $1.4 trillion over the next eight years, largely on data centers.On the other hand, in a separate interview with CNBC, Huang reiterated that Nvidia’s investments are minor compared to the overall financing required for AI expansion. “Whatever we decide to invest is a small percentage, very small percentage of the overall amount of infrastructure, capital they’re going to have to raise,” he said.
Nvidia’s investment strategy
Nvidia’s involvement with CoreWeave has been long in the making. The company played a crucial role in anchoring CoreWeave’s IPO, offering a $250 million order at $40 per share, when investor sentiment remained cautious due to a dry IPO market. CoreWeave ended up raising $1.5 billion during the offering.The relationship is strategic. CoreWeave rents out Nvidia’s high-powered GPUs to clients building AI models—essentially extending Nvidia’s reach deeper into the booming AI development space without building its own cloud service. CoreWeave CEO Mike Intrator called Nvidia a “wonderful partner” and described their relationship as “symbiotic” during post-IPO interviews.
