The Rundown Deep Dive: Is Nvidia Funding a Data Center Collapse?
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Sep 27, 2025 Exploring Nvidia's multifaceted role in the AI economy reveals intriguing dynamics. The company is not just selling chips but investing heavily in AI firms like CoreWeave and OpenAI. This 'circular financing' raises questions about its sustainability and potential risks of a data center collapse. Historical parallels to previous infrastructure bubbles surface, hinting at possible excessive capital expenditure. Amidst admiration for Nvidia's strategy, concerns about an impending bubble loom large if AI demand falters. A gripping analysis of innovation versus risk!
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CoreWeave: The GPU Landlord
- CoreWeave acts like a landlord, buying tens of thousands of NVIDIA GPUs and renting compute to firms like Microsoft and OpenAI.
- NVIDIA was an early investor and now owns ~7% while guaranteeing to buy unsold CoreWeave capacity through 2032.
Investor Turns Customer Backstop
- NVIDIA holds a ~7% stake in CoreWeave and expanded a partnership with a $6.3B deal that backstops CoreWeave's sales.
- That safety net means NVIDIA's investment likely cycles back into purchases of its own GPUs.
NVIDIA's Big OpenAI Bet
- NVIDIA announced it may invest up to $100B into OpenAI, funding data centers that will run on NVIDIA GPUs.
- The investment is structured as $10B chunks tied to each gigawatt of capacity OpenAI builds.