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Jan 26 (Reuters) – Nvidia has invested $2 billion in CoreWeave, becoming the AI infrastructure provider’s second-largest shareholder, as the companies expand their partnership \u200bto boost data center capacity in the United States.<\/p>\n
The announcement on \u200cMonday sent CoreWeave’s shares up 9% in premarket trading.<\/p>\n
So-called neocloud companies like CoreWeave, which provide tech \u200ccompanies with the hardware and cloud capacity needed to build, run and deploy AI technologies, have seen a surge in demand in recent years as enterprise adoption of AI picks up.<\/p>\n
The fresh investment from Nvidia will help CoreWeave speed \u2060up the procurement of land \u200cand power required to build data centers. CoreWeave is targeting to build more than 5 gigawatts in AI data center \u200dcapacity by 2030.<\/p>\n
Nvidia will invest in CoreWeave at a purchase price of $87.20 per share, the companies said. That represents an addition of roughly 23 million shares, nearly doubling \u200bNvidia’s stake in the firm, according to Reuters calculations based on data \u200ccompiled by LSEG.<\/p>\n
Nvidia was CoreWeave’s third largest shareholder with a 6.3% stake, or 24.3 million shares, in the company.<\/p>\n
The chip giant has drawn scrutiny for pouring billions of dollars into AI firms including ChatGPT maker OpenAI and neoclouds, raising investor concerns about potential circular financing.<\/p>\n
A CoreWeave spokesperson told Reuters that the \u2060cash from the new investment will not \u200bbe used to purchase Nvidia processors, but directed \u200btoward accelerating other data center investments, research and development, and scaling its workforce.<\/p>\n
Once a cryptocurrency miner, CoreWeave has pivoted to capitalize \u200don the AI \u2060boom by repurposing its infrastructure to lease Nvidia GPUs to tech and AI firms.<\/p>\n
“Nvidia is the leading and most requested computing platform at every \u2060phase of AI … This expanded collaboration underscores the strength of demand we are seeing across \u200cour customer base,” CoreWeave CEO Michael Intrator said.<\/p>\n
(Reporting by Deborah Sophia \u200cin Bengaluru; Editing by Shinjini Ganguli)<\/p>\n<\/p><\/div>\n