Nvidia (NASDAQ:NVDA | NVDA Price Prediction) first invested approximately $100 million in CoreWeave (NASDAQ:CRWV) in 2023 and added to its stake around CoreWeave’s IPO last March. In 2025, the close relationship between the two companies drew sharp criticism over potential “circular financing,” with skeptics arguing Nvidia was effectively financing demand for its own GPUs through equity investments in major customers.
CoreWeave turned out to be one of Nvidia’s worst-performing investments through most of 2025, but despite these concerns, Nvidia is now making a significantly larger bet on the specialized AI cloud provider.
Nvidia Doubles Down
This morning, Nvidia announced a $2 billion investment in CoreWeave Class A common stock priced at $87.20 per share. The deal significantly deepens the strategic partnership between the two companies.
Under the expanded collaboration, CoreWeave will adopt Nvidia’s CPU and storage platforms, deploy multiple generations of Nvidia infrastructure — including the upcoming Rubin platform and Vera CPUs — and accelerate the buildout of AI factories. The companies aim to bring more than 5 gigawatts of AI infrastructure online by 2030. CoreWeave will also test and validate its AI-native software stack for potential inclusion in Nvidia’s reference architectures.
The investment benefits both parties. For Nvidia, it secures a major, high-growth customer committed to heavy GPU purchases while expanding its ecosystem. For CoreWeave, the $2 billion cash infusion strengthens its balance sheet and helps fund aggressive expansion of land, power, and data center capacity needed to meet surging AI demand.
Circular Financing Concerns Persist
Despite Nvidia CEO Jensen Huang strongly disputing the notion of circular financing, the new investment is unlikely to fully dispel the criticism. Many analysts still view these arrangements as Nvidia indirectly supporting demand for its own chips. CoreWeave CEO Michael Intrator has previously called the circular financing allegations “ridiculous,” noting that Nvidia’s total stake remains relatively small compared to CoreWeave’s more than $25 billion in total capital raised.
Intrator attributed the relationship to a market imbalance where compute demand far exceeds supply. Supporters see these arrangements as strategic to secure AI dominance, with the sector projected to reach multi-trillion-dollar scale by 2030. Even so, that investment has markedly increased.
Yet, there are solid reasons for CoreWeave’s arrangements. Nvidia’s capacity commitment continues to ensure steady revenue amid surging AI demand, offsetting risks associated with its assets being idle. The new investment allows CoreWeave to continue building out to meet the burgeoning demand.
CoreWeave stock reacted strongly to the news and is rising pver 14% in morning trading today. The stock is currently up approximately 30% year-to-date.
For investors considering buying now, the case has two sides. On the positive side, CoreWeave benefits from strong secular demand for GPU cloud capacity, a large revenue backlog, and major contracts, including with OpenAI and Microsoft (NASDAQ:MSFT). The company has shown impressive execution speed in a capital-intensive industry.
However, risks remain elevated. CoreWeave continues to report significant operating losses, carries substantial debt, and faces questions around long-term GPU utilization and pricing power. The stock trades at a premium valuation despite its recent volatility.
Wall Street Remains Upbeat
The latest Nvidia investment has boosted short-term sentiment, with shares climbing from recent lows around the mid-$70s to over $93 today. Some coverage highlights CoreWeave’s execution in scaling AI infrastructure and its backlog as reasons for optimism, even as other AI infrastructure names face volatility. Analysts note the partnership signals continued confidence from Nvidia in CoreWeave’s ability to deploy large-scale capacity efficiently.
Still, valuation debates persist, with the stock’s recovery from earlier 2026 dips viewed by some as a potential entry point for those who believe in sustained AI demand, while others caution about leverage and dependency risks.
Key Takeaways
CoreWeave offers high-upside exposure to the AI infrastructure boom, supported by Nvidia’s latest endorsement and robust customer demand. While the partnership provides strategic advantages and revenue visibility, the persistent circular financing debate and high financial leverage warrant caution.
The stock may represent an attractive opportunity for long-term investors who believe in AI growth and can tolerate volatility, but it is not without meaningful execution and valuation risks. Investors should weigh CoreWeave’s strong backlog and expansion plans against ongoing profitability challenges and dependence on Nvidia’s continued collaboration.
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