As the two businesses deepen their collaboration to increase data centre capacity in the US, Nvidia has invested $2 billion in CoreWeave, becoming the AI infrastructure provider’s second-largest shareholder.
CoreWeave’s stock increased 9% in premarket trading following the announcement on Monday.
As industry use of AI speeds up, so-called neocloud companies like CoreWeave, which give IT companies the hardware and cloud capacity needed to design, run, and deploy AI technologies, have experienced a boom in demand in recent years.
Nvidia’s recent investment will enable CoreWeave to acquire the land and electricity needed to construct data centres more quickly.
By 2030, CoreWeave hopes to have more than 5 gigawatts of AI data centre capacity.
According to the firms, Nvidia will invest $87.20 per share in CoreWeave, that amounts to an addition of over 23 million shares, almost doubling Nvidia’s holding in the company.
With 24.3 million shares, or 6.3% of the company, Nvidia was the third-largest shareholder in CoreWeave.
Investor concerns about possible circular funding have been raised by the chip giant’s billion-dollar investments in AI companies, such as OpenAI, the producer of ChatGPT, and neoclouds.
The money from the new investment will go into expanding its workforce, research and development, and other data centre investments rather than buying Nvidia processors.
CoreWeave, a former bitcoin miner, has changed course to take advantage of the AI boom by leasing Nvidia GPUs to tech and AI companies.
“At every stage of AI, Nvidia is the most popular and sought-after computer platform… Michael Intrator, CEO of CoreWeave, stated, “This expanded collaboration highlights the strength of demand we are seeing across our customer base.”
