Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

aurareturn•about 1 hour ago

Why is it a big deal?

Nvidia invested $2b into CoreWeave for 9% equity stake. CoreWeave is spending $35b in CapEx in 2026. Therefore, Nvidia's investment is only 5.7% of CoreWeave's single year CapEx. The other $32b is coming from other sources that isn't Nvidia. This is hardly circular.

Nvidia invests in Neoclouds because it's a hedge against hyperscalers having too much power, ie designing and prioritizing their own chips, and not fully using Nvidia's rack design. Neoclouds give hyperscalers competition. Neoclouds accept Nvidia investments because it allows them to secure Nvidia chips first, which is a competitive advantage since new Nvidia chips have been as much as ~5-20x more efficient than old Nvidia chips.

Nvidia was planning to directly compete against hyperscalers through DGX Cloud. They cancelled public DGX Cloud access when they found that investing in Neoclouds would accomplish the same goals without having to compete against their biggest customers.

If you're Nvidia, it's smart because Neoclouds that you have a large stake in will deploy your full stack from GPUs to networking to storage racks. They will share valuable usage data back to you so you can design a better next generation. Hyperscalers are likely a lot less cooperative, prefer to use their own designs if possible, and will guard their usage data.

re-thc•3 minutes ago

> Why is it a big deal? Nvidia invested $2b into CoreWeave for 9% equity stake.

Depends if they actually got the $2b in real money. There's a difference.

It's a big deal if no money was involved. Nothing even entered the company directly. Some deals have structured with Special Purpose Vehicles where money goes to the SPV. The SPV buys GPUs with it (from Nvidia). GPUs is loaned back to the company involved. So this company is stuck with this GPU rental, which may or may not be what they want and not $2b.

This sounds like a bad deal? So Nvidia had to sweeten the deal and promise min utilization on those GPUs by renting it themselves even if they don't need it.

So what's income and what's expense here?

That's the problem. It's inflated and messed up.

KaoruAoiShiho•about 1 hour ago

You're probably just responding to the headline but this person is an AI bull and isn't claiming it's a big deal, she's going into it and explaining it.

hirako2000•8 minutes ago

Just the look and feel and the subscribe fixed position in particular, made me bounce.

aurareturn•about 1 hour ago

It's a bad headline because most of the article isn't about circular financing and it's only 5.7% of anyway.

bwfan123•28 minutes ago

Circular financing is a dead horse - dont beat it. Instead, what is more interesting could be: Is there a path to these builds becoming economically profitable ? Towards this, some metrics to watch are: 1) ROI per token per dollar 2) Enterprise token budgets. And at what point there is an overbuild relative to the token roi. Alternatively, pressure on token costs due to the open weights models etc.

dainiusse•13 minutes ago

Yandex, not nebius. Surprised how the world gets on kgb again and again, and again

charcircuit•about 1 hour ago

Would this author prefer that Nvidia buy equity using GPUs directly? I don't think it actually counts as circular.

anon291•about 1 hour ago

All financing is circular. This concern is beyond the pale contrived

Financing is circular because creating a liability for one party (debt) creates an asset for another (the bank) off of which more debt can be secured

A bank / financier sells trust and reassurance. They otherwise invent most money from thin air.

484994949595•about 1 hour ago

boomers will "invest" at a loss in anything that has the AI tag, this is a non issue. the whole ecosystem can bled cash for another couple years while the usual suspects blabber on about the singularity to korean pension funds

paradoxyl•23 minutes ago

I predict a 2030 end date for the bubble, as that is when many globalist think tanks declare they will invade Russia to take their resources, and it's unlikely even China can ignore that, and here comes World War III.

Mistletoe•about 1 hour ago

Isn’t that just what people tell themselves at the top?

https://www.currentmarketvaluation.com/models/s&p500-mean-re...

uncivilized•2 minutes ago

You're saying people tell themselves at the top that the run can continue for another few years?

Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

⚡ Community Insights

Discussion (13 Comments)Read Original on HackerNews