Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom

Why is it a big deal?

Nvidia invested $2b into CoreWeave for 9% equity stake. CoreWeave is spending $35b in CapEx in 2026. Therefore, Nvidia's investment is only 5.7% of CoreWeave's single year CapEx. The other $32b is coming from other sources that isn't Nvidia. This is hardly circular.

Nvidia invests in Neoclouds because it's a hedge against hyperscalers having too much power, ie designing and prioritizing their own chips, and not fully using Nvidia's rack design. Neoclouds give hyperscalers competition. Neoclouds accept Nvidia investments because it allows them to secure Nvidia chips first, which is a competitive advantage since new Nvidia chips have been as much as ~5-20x more efficient than old Nvidia chips.

Nvidia was planning to directly compete against hyperscalers through DGX Cloud. They cancelled public DGX Cloud access when they found that investing in Neoclouds would accomplish the same goals without having to compete against their biggest customers.

If you're Nvidia, it's smart because Neoclouds that you have a large stake in will deploy your full stack from GPUs to networking to storage racks. They will share valuable usage data back to you so you can design a better next generation. Hyperscalers are likely a lot less cooperative, prefer to use their own designs if possible, and will guard their usage data.

Circular financing is a dead horse - dont beat it. Instead, what I would like to see is: Is there a path to these builds becoming economically profitable ?

Towards this, some metrics to watch could be:

1) ROI per token per dollar

2) Enterprise token budgets

And at what point there is an overbuild relative to the token roi. Alternatively, pressure on token costs due to the open weights models etc.

All financing is circular. This concern is beyond the pale contrived

Financing is circular because creating a liability for one party (debt) creates an asset for another (the bank) off of which more debt can be secured

A bank / financier sells trust and reassurance. They otherwise invent most money from thin air.

Would this author prefer that Nvidia buy equity using GPUs directly? I don't think it actually counts as circular.

boomers will "invest" at a loss in anything that has the AI tag, this is a non issue. the whole ecosystem can bled cash for another couple years while the usual suspects blabber on about the singularity to korean pension funds