NEW YORK — Nvidia purchased $2 billion in CoreWeave shares at $87.20 each on January 23, disclosed Monday, acquiring approximately 10% ownership in the AI cloud provider while reigniting scrutiny over circular financing patterns where chipmakers invest in customers who then purchase those same chips.
Investment Deepens Vendor-Customer Entanglement
The transaction, announced through a Securities Purchase Agreement, positions Nvidia as CoreWeave’s second-largest shareholder after previously holding a 6.3% stake. CoreWeave shares surged 9.21% to close at $101.545 Monday, with intraday trading reaching $108.65.
The deal supports CoreWeave’s plan to build 5 gigawatts of AI data center capacity by 2030, with Nvidia providing land acquisition assistance and priority access to its upcoming Rubin platform, Vera CPUs, and Bluefield storage systems.
Circular Capital Flows Raise Systemic Questions
Critics warn the arrangement exemplifies problematic interdependency within the AI infrastructure ecosystem. Nvidia invests billions in CoreWeave, which then commits those funds to purchasing Nvidia hardware—creating self-reinforcing revenue loops that some analysts compare to vendor financing schemes from the dotcom era.
CoreWeave carried $18.81 billion in debt obligations as of September 2025, using its GPU inventory as collateral, according to company filings. The business model relies on raising debt secured against the same Nvidia chips the company purchases with investor capital.
“Nvidia, Oracle, AMD and CoreWeave are simultaneous suppliers, financiers, and stakeholders,” noted financial analysts tracking AI infrastructure concentration risk. This creates dependencies that could amplify market volatility if enterprise AI demand slows or hardware utilization rates decline.
Discounted Share Price Signals Strategic Timing
Nvidia purchased CoreWeave Class A shares at $87.20—approximately 6.2% below Friday’s closing price of $92.98. The discount suggests negotiated terms rather than open market transactions, standard practice for large strategic investments but raising questions about valuation pressures.
The chipmaker now holds approximately 47.3 million CoreWeave shares after adding 22,935,780 to its existing position. CoreWeave disclosed a separate $6.3 billion order from Nvidia equipment extending through April 2032, creating reciprocal financial obligations between the companies.
Revenue Visibility Versus Concentration Risk
CoreWeave reported $1.36 billion revenue in Q3 2025 with a $56 billion contract backlog, according to the company’s investor materials. Proponents argue long-term agreements provide revenue certainty supporting debt serviceability.
However, the concentration of both revenue sources and equity ownership within a single vendor creates vulnerability. CoreWeave’s operations depend entirely on Nvidia GPU availability, pricing, and technology roadmaps, limiting negotiating leverage and strategic flexibility.
The company went public on Nasdaq in March 2025 after transitioning from cryptocurrency mining to AI infrastructure services. Current market capitalization reflects approximately 10x projected 2026 revenue, a valuation multiple some analysts consider elevated given debt levels and customer concentration.
Industry Precedents and Bubble Warnings
Similar circular financing arrangements emerged during the late 1990s technology boom, when equipment vendors provided customer financing that inflated both parties’ revenues before demand collapsed. While AI infrastructure demand remains strong across enterprise sectors, the self-reinforcing capital structure raises questions about sustainability if growth rates moderate.
Market observers note the arrangements remain highly visible through SEC filings and public disclosures, unlike hidden leverage that characterized previous financial crises. The transparency allows investors and regulators to monitor concentration risk, though it does not eliminate underlying vulnerabilities.
Nvidia’s strategic investments span multiple AI infrastructure providers, creating an ecosystem heavily dependent on sustained enterprise AI adoption and capital expenditure growth. The company’s dual role as both supplier and significant shareholder in customer companies represents a notable shift from traditional vendor-customer relationships in technology infrastructure markets.
CoreWeave shares have gained approximately 45% since the company’s March 2025 IPO, driven primarily by AI infrastructure demand and Nvidia partnership announcements.
