Nvidia Just Piled $2 Billion Into This Key AI Partner. Should Investors Follow Suit?

Nvidia (NASDAQ: NVDA) has go a cash-generating machine. As request for its GPUs soars amid the AI boom, its escaped currency travel has climbed to $77 cardinal implicit the past 12 months. It precocious enactment $2 cardinal of that currency to work, adding to its concern successful CoreWeave (NASDAQ: CRWV). The chipmaker present owns 11.5% of the company.

CoreWeave is simply a "neocloud" company, specializing successful information centers designed for AI grooming and inference. It builds information centers and rents them retired to large tech companies, including Microsoft, Meta, and 1 of its biggest investors, Nvidia. The quality of Nvidia's accrued involvement successful the concern sent CoreWeave shares higher, truthful investors whitethorn beryllium wondering whether they should travel suit aft the large move.

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CoreWeave's choky narration with Nvidia puts it successful an fantabulous presumption to service its customers. It has ample entree to Nvidia's almighty GPUs, and the caller woody with Nvidia ensures it'll beryllium capable to physique caller unreality infrastructure utilizing Nvidia's Rubin platform, its Vera CPUs, and its BlueField retention system.

Additionally, Nvidia is acting arsenic a backstop for CoreWeave's buildout. Nvidia is obligated to wage for immoderate unused CoreWeave capableness done April of 2032, up to $6.3 billion.

The program is to usage the $2 cardinal currency infusion from the banal merchantability to accelerate CoreWeave's buildout of 5 gigawatts of AI information centers by 2030. But the outgo of gathering those information centers is acold greater than $2 billion. CoreWeave spent $1.9 cardinal connected superior expenditures successful the 3rd quarter, and it spent $6.9 cardinal connected "construction successful progress," which it excludes from capex until its deployed. Meanwhile, the company's operating currency travel came to $1.5 cardinal done the archetypal 9 months of the year. As such, CoreWeave volition inactive request to instrumentality connected important indebtedness to accelerate its information halfway buildout plans.

Lenders are consenting to springiness CoreWeave wealth based connected its adjacent narration with Nvidia (and its backstop) and the monolithic backlog of contracts CoreWeave has accumulated. As of the extremity of the 3rd quarter, CoreWeave had a backlog of $55.6 cardinal successful lawsuit contracts.

But involvement connected its indebtedness is simply a immense resistance connected its profits, and the economics of gathering and renting information centers isn't rather panning retired conscionable yet. Interest disbursal totaled $841.4 cardinal done the archetypal 9 months of 2025, astir quadruple the magnitude from the aforesaid play successful 2024. Meanwhile, operating income fell to conscionable $43.6 cardinal done the archetypal 9 months of 2025, down from $211.7 million. Even arsenic CoreWeave scales and turns astir its operating margin, involvement and depreciation volition proceed to devour into its nett income.