Nvidia’s Big Bet & CoreWeave’s Curious Case

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Now, Nvidia – a rather portly fellow, if you ask me, stuffed to the gills with cash – has been tossing around a colossal two billion dollars. Not for sweets, mind you, but for a company called CoreWeave. Two billion! It’s enough to make a goblin blush. They now own a slice – eleven and a half percent, to be precise – of this peculiar operation. And a portfolio, like a good detective, must investigate.

CoreWeave, you see, isn’t building toys or chocolates. Oh no. They’re building… “neoclouds.” A rather silly name, if you ask me, but apparently it means they construct enormous sheds filled with blinking lights and whirring machines – data centers, the grown-ups call them – for the purpose of… well, thinking. Artificial thinking, to be exact. They rent these thinking sheds to the big boys – Microsoft, Meta, and even Nvidia itself, which is a bit like a fox renting a chicken coop. The shares, naturally, did a little jig when Nvidia coughed up the cash.

A Cozy Arrangement

This CoreWeave, you see, is terribly chummy with Nvidia. They get first dibs on Nvidia’s most powerful brain-boxes – the GPUs – and now, thanks to this latest splurge, they’ll be getting the very newest, shiniest ones – the Rubin platform, Vera CPUs, and BlueField storage. It’s like giving a particularly clever hamster the best wheels and sunflower seeds. Nvidia, being a generous (and powerful) sort, has even promised to pay for any of CoreWeave’s sheds that aren’t immediately snapped up by customers. Up to six point three billion dollars, mind you. A truly enormous promise, and one that smells faintly of… well, let’s just say a careful calculation.

The plan is to cram five gigawatts of these thinking sheds onto the landscape by 2030. That’s enough power to make a small planet glow in the dark. But building these things isn’t cheap. They’ve already splurged a staggering $1.9 billion on the actual construction, and another $6.9 billion is tied up in things that aren’t quite finished yet. They’ve managed to scrape together $1.5 billion in operating cash, but that barely makes a dent. They’ll need to borrow a mountain of money, and borrowing, as any sensible squirrel knows, comes with a price.

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The Debt Monster

The lenders, of course, are quite happy to hand over the cash. They know Nvidia has CoreWeave’s back, and they’ve seen the pile of contracts – a whopping $55.6 billion worth. But interest, my dear friends, is a greedy beast. It’s already gobbled up $841.4 million in the first nine months, four times as much as last year. And operating income? It’s dwindled to a paltry $43.6 million. Even if CoreWeave manages to turn things around, those interest payments and the cost of replacing those whirring machines will continue to nibble away at their profits.

There’s a considerable risk here, you see. CoreWeave needs to scale up quickly and profitably. Any delays in building those sheds will have serious consequences. They can’t rent out what doesn’t exist. And we’ve already seen a little wobble – a developer experienced some delays, and the market didn’t much care for it. Scaling to five gigawatts by 2030 is a monstrous undertaking, and a single misplaced brick could bring the whole thing tumbling down. As a portfolio manager, I’m watching this closely. It’s a fascinating, if slightly unsettling, spectacle.

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2026-02-02 01:22