Key Points
- NVIDIA invested $2 billion in AI infrastructure company CoreWeave.
- CoreWeave shares jumped about 12% following the announcement.
- NVIDIA bought CoreWeave Class A shares at $87.20 each, below the prior close.
Shares of CoreWeave surged on Monday after Nvidia revealed a $2 billion investment in the fast-growing artificial intelligence infrastructure provider, giving investors fresh confidence in the company’s long-term prospects.
According to the companies, Nvidia purchased Core-Weave Class A common stock at $87.20 per share—a discount to Friday’s closing price of $92.98. The capital injection is expected to help CoreWeave speed up its plan to build “5 gigawatts of AI factories by 2030.”
“This deal allows us to accelerate our build, which will lead to continued diversification and reducing dependency on any particular client as we scale into this additional data center capacity,” CoreWeave CEO Mike Intrator said Monday on CNBC’s Squawk on the Street.
Gigawatts have become a go-to way of measuring AI data center capacity. To put that scale into perspective, five gigawatts roughly equals the annual electricity usage of about 4 million U.S. homes, based on CNBC’s analysis of Energy Information Administration data.
NVIDIA CEO Jensen Huang emphasized that the investment is just one piece of a much larger funding puzzle.
“We’ve invested $2 billion into CoreWeave, but recognize that the amount of funding that needs to be raised yet to support that five gigawatts is really quite significant,” Huang told CNBC. “We’re investing a small percentage of the amount that ultimately has to go and be provided.”
CoreWeave makes most of its money by building and leasing data centers packed with Nvidia’s graphics processing units, which are essential for training AI models and running large-scale workloads. Often described by investors as a “neocloud” company, Core-Weave has become a key player in the rapidly expanding AI infrastructure ecosystem.
NVIDIA was already a major backer of CoreWeave before Monday’s announcement. In September, Core-Weave disclosed in a filing with the U.S. Securities and Exchange Commission that it had secured an order worth at least $6.3 billion from Nvidia. Under that agreement, Nvidia is obligated to purchase any remaining unsold capacity through April 2032.
CoreWeave went public on the Nasdaq in March and has raised billions in both debt and equity financing, including funding from Nvidia.
“We’re in the beginning of the AI infrastructure buildout, and the demand is just extraordinary,” Huang said.
As AI startups race to secure computing power, CoreWeave has been striking massive deals at a rapid pace. In September, the company said it agreed to provide Meta with $14.2 billion worth of AI cloud infrastructure, just days after expanding its contract with OpenAI to $22.4 billion.
Still, CoreWeave’s stock has been volatile in recent months, as some investors have raised concerns about the company’s growing debt load used to finance these multibillion-dollar agreements.
Intrator has pushed back on those worries, saying earlier this month that AI will eventually be embedded into “absolutely everything we do” and that the technology will “continue to pay dividends over the next 100 years.”
“What you’re seeing is the base-load infrastructure being built right now at a pace that historically wasn’t even considered,” he said. “Companies like CoreWeave—and there are others—are building the infrastructure needed to deliver this for their clients.”
