Nvidia closes deal to fund CoreWeave's idle cloud.

247 - CoreWeave announced on Monday (15) a US$ 6,3 billion contract with Nvidia, according to information published by Valor EconômicoThe agreement, initially signed in April 2023 and renewed on the 9th of this month, obligates the chip manufacturer to purchase any unused cloud computing capacity until April 13, 2032, if the partner's data centers are not fully occupied by its own clients.

The deal strengthens CoreWeave's position in the digital infrastructure market, but also exposes Nvidia to considerable risks. According to... PriceWhile CoreWeave's shares rose after the announcement of the deal, Nvidia's shares fell due to a preliminary investigation by the Chinese regulator, which concluded that the company violated antitrust laws.

Dependence on heavy investment

CoreWeave has accelerated its investments in data centers, with projected investments between US$20 billion and US$23 billion in 2025 alone. This model implies high debt, increasing the risk of unused capacity in the future. To try to reassure investors, the company maintains that its spending is strategic and "based on success."

“We’re not buying infrastructure hoping that people will come and use it,” said Brannin McBee, co-founder and director of development at CoreWeave, in an interview with Barron's.

Long-term relationship

In addition to the new contract, Nvidia already acts as a GPU supplier for CoreWeave and, as of June 30, held approximately 6,6% of the company's shares. The renewal of the 2023 agreement, now publicly announced, highlights the two companies' efforts to consolidate a long-term strategic partnership, even in the face of regulatory pressures and a market undergoing accelerated transformation due to the global race in artificial intelligence and high-performance computing.