Nvidia invests $2bn in CoreWeave in new data centre push

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Nvidia has agreed to invest $2bn in cloud computing provider CoreWeave, in the latest example of how the chipmaker is using the profits from its AI dominance to support some of its biggest customers.

The two companies said on Monday that the deal would help CoreWeave to accelerate construction of specialised data centres — which Nvidia calls “AI factories” — by 2030.

“CoreWeave’s deep AI factory expertise, platform software and unmatched execution velocity are recognised across the industry,” said Jensen Huang, chief executive of Nvidia.

“Together, we’re racing to meet extraordinary demand for Nvidia AI factories — the foundation of the AI industrial revolution.”

Nvidia, which first invested in CoreWeave in 2023, bought $2bn worth of stock at a price of $87.20 per share, the companies said. 

Shares in CoreWeave, which listed last year, jumped as much as 10 per cent to $101.80 in pre-market trading.

The new CoreWeave deal is the latest in a series of multibillion-dollar investments by Nvidia in some of the largest customers and consumers of its AI chips, including a commitment to invest up to $100bn in OpenAI over several years. Earlier on Monday, Nvidia’s venture arm participated in a new $200mn funding round for Synthesia, an AI video start-up.

The deal comes as Nvidia faces mounting competition from Big Tech companies’ own AI processors, particularly Google’s tensor processing units, which are being adopted by Anthropic among others.

OpenAI itself is working with chip designer Broadcom to develop its own AI accelerators at the same time as striking a deal with Nvidia’s main rival AMD to buy graphics processing units (GPUs) — the chips needed to develop AI models.

Huang is using the company’s formidable balance sheet to strengthen its alliance with CoreWeave, one of the most aggressive and ambitious of the “neocloud” companies that have risen in the past three years to meet demand from Big Tech groups and corporate customers for Nvidia’s chips.

Under the terms of their latest deal, as well as gaining access to Nvidia’s latest “Rubin” generation of GPUs, CoreWeave will also offer customers Nvidia’s Vera central processing units on a standalone basis for the first time. That deal brings the AI chipmaker into head-on competition with the likes of Intel and AMD, which dominate the server CPU market.

Nvidia already held $3.3bn worth of CoreWeave stock at the time of its most recent regulatory disclosures in mid-November, after becoming a key investor in the cloud provider’s initial public offering in March last year.

The Silicon Valley group has also agreed to buy as much as $6.3bn worth of cloud services from CoreWeave, becoming a backstop for any “residual unsold capacity” in a deal running to 2032.

CoreWeave’s stock price has become a barometer for public-market investors’ AI excitement, despite concerns about the scale of its borrowings and recent delays to at least one of its infrastructure projects. The stock has more than doubled since its IPO last year but it has also lost about half its value since its peak in June.