Chapter 1: What is NVIDIA's $2 billion investment in CoreWeave about?
Welcome to the podcast. I'm your host, Jaden Schaefer. Today on the podcast, we're talking about the massive investment deal that NVIDIA has just made. $2 billion is going to go towards CoreWeave, who has a ton of debt, and it's going to help them add 5 gigawatts of AI compute.
This is an absolutely massive deal, and this is also kind of an interesting story considering the situation that CoreWeave has found themselves in and how they got here. So we'll be covering all of that on the podcast today. But before we do, I wanted to tell you about the newest feature that we have just added to AI box that I am so excited about.
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Chapter 2: How will CoreWeave's AI compute capacity expand by 2030?
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Chapter 3: What financial challenges is CoreWeave facing?
So let me know if you build anything cool, and I'm happy to share that on the podcast. All right, let's get into the episode today. So what was really impressive to me is NVIDIA, of course, just like the price tag on this is $2 billion for CoreWeave. And I think they already had quite a close relationship because CoreWeave is a data center operator.
and they're trying to very quickly grow a lot of their AI infrastructure footprint over the next 10 years, really. So this investment is now going to value CoreWeave's Class A shares at $87.20 a piece, and it is intended to basically speed up their plan to deploy more than 5 gigawatts of AI compute capacity by 2030.
So that level of power capacity is going to basically place CoreWeave among the top companies you know, the most energy intensive AI infrastructure operators in the world. It's going to be on par with the same scale that you see, you know, some of these hyperscalers like Google and OpenAI and all of these other people that are, you know, building their own infrastructure.
CoreWeave is going to be right there with them. So as part of this deal, NVIDIA and CoreWeave say that they're going to kind of jointly develop what they're calling AI factories. These are large scale data centers and they have a very specific purpose, which is for training and running AI models. And that's all of it is, of course, going to be using NVIDIA's hardware.
So NVIDIA, this is a smart move for them. They are finding one of the bigger, one of the bigger players in data centers. And they're saying, look, we'll invest in you, but you're going to lock in with our hardware. And of course, also their software stack. So CoreWeave is also going to standardize on NVIDIA technologies across its platform.
So that includes the upcoming Rubin GPU architecture, which is expected to come after the Blackwell along with Bluefield Networking and Storage Systems and NVIDIA's, they kind of have this new CPU line that they just announced, which is called Vera. So CoreWeave's going to be integrating with all of that.
I think it's also a really interesting investment because it's basically a vote of confidence when CoreWeave has been under a lot of scrutiny for its basically the structure of its capital structure, right?
So they've leaned really heavily on debt to finance their expansion, which, like, let's be honest, this company is growing at an absolutely impressive rate, but they're using their own inventory of GPUs as collateral for all of the debt that they've taken on. So according to, if you look at PitchBook and you kind of look at some of the data over there, CoreWeave has about $18.81 billion in debt,
as of September last year. And so at the same time, they also have about $1.36 billion in revenue in the third quarter. So I think you can see there's also, you know, a lot of demand for their services, but also like almost $19 billion in debt. And let's say they're making like $5 billion a year. You know, they have to go service all of that debt.
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