Happy Saturday, and welcome to Inc.’s 1 Smart Business Story! As the AI landscape evolves at a breakneck pace, we’re taking a look at a major partnership expansion between two key players. 

Nvidia recently invested $2 billion in Coreweave, becoming the cloud provider’s second-largest shareholder and reinforcing its bet on specialized infrastructure built for AI workloads. The move builds on a long-standing relationship between the two companies and signals Nvidia’s growing interest in not just selling chips, but in shaping the ecosystem that runs them. 

As demand for GPU compute surges, the expanded stake coincides with Coreweave’s push to  build out massive AI factories, positioning itself as a key player in powering large-scale model training and interference. 

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BY MELISSA ANGELL, SENIOR WRITER

The partnership between Nvidia and CoreWeave adds to concerns about the intermingled financing of the AI world.

Nvidia just became CoreWeave’s second-largest shareholder after investing an additional $2 billion into the company, further bolstering concerns about the intermingled financing of the artificial intelligence bubble. Still, both companies say that AI is entering its next stage in mass adoption.

The expanded partnership will see CoreWeave help build out AI factories as enterprise demand accelerates, the companies said, in addition to CoreWeave being among the first to deploy new Nvidia products. CoreWeave is an AI hyperscaler that rents out access to more than 300,000 NVIDIA GPUs across dozens of data centers that it operates.

In a Monday post, CoreWeave CEO Michael Intrator underscored that the deal is the next step as AI transitions from “the pilot phase into production.” Nvidia CEO Jensen Huang says that AI is responsible for the “largest infrastructure buildout in human history,” and praised CoreWeave’s expertise.

“Together, we’re racing to meet extraordinary demand for NVIDIA AI factories—the foundation of the AI industrial revolution,” Huang said in a written statement.

Shares of CoreWeave are up roughly 29 percent year-to-date, with the stock popping roughly 10 percent on Monday’s announcement, hitting a high of $108.65 per share before leveling down to $98.31 at market close.

Nvidia’s announcement is welcome news for CoreWeave, as the hyperscaler has survived a rocky couple of months. Earlier in January, investors slapped CoreWeave with a securities fraud lawsuit over its failed merger with Core Scientific, a digital infrastructure provider and crypto miner. The lawsuit also centers on delays CoreWeave experienced with a cluster of data centers.

CoreWeave attributes severe wind and rains as the reason behind the two-month delay at the complex in Denton, Texas. But Ed Zitron, a noted AI bear, pointed out online that weather in Denton appeared to stay “pretty dry,” referencing weather reports for the summer that showed just three days of thunder showers.

Nvidia’s massive investment also will add to concerns of the circular nature of investments within the AI ecosystem, which Huang himself has denounced. Two days ago, Google’s DeepMind Sir Demis Hassabis told the Financial Times that certain segments of the AI space do look “bubble-like.”

Darren Kimura, CEO and president of AISquared, a software company that helps enterprise firms with AI adoption, says that the Nvidia investment is a form of insurance.

“It protects NVIDIA’s distribution channel, reinforces CoreWeave as a scaled route-to-market for next-generation GPU infrastructure, and helps de-risk the buildout of real capacity where the bottlenecks are now land, power, and time-to-permit,” Kimura says. “It’s a shift from being purely a chip supplier to being a true ecosystem partner in building AI factories.”

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