Nvidia’s (NVDA) in $6.3B Deal With CoreWeave (CRWV)

CoreWeave (CRWV) were higher by about 5% in early U.S. trading Monday after the cloud computing company entered into a $6.3 billion deal with Nvidia (NVDA) to guarantee use of its excess server capacity, according to a filing with the Securities and Exchange Commission.

Under the agreement, Nvidia will buy any unused computing resources from CoreWeave through April 2032. The arrangement ensures that CoreWeave’s vast fleet of data centers will not sit idle if customer demand fluctuates. If CoreWeave’s clients don’t fully book its servers, Nvidia is obligated to step in and purchase the residual capacity. Either company can exit the deal if one breaches terms or faces bankruptcy.

For CoreWeave, the agreement locks in a long-term buyer for its spare capacity, reducing revenue risk as it builds out infrastructure. For Nvidia, it secures reliable access to cloud-based GPU resources at a time when demand for artificial intelligence training far exceeds supply. The agreement also strengthens ties between the two firms, as Nvidia not only supplies CoreWeave with GPUs but also holds an equity stake.

Nvidia has already made CoreWeave one of its biggest bets. At the end of the second quarter, the AI chipmaker owned 24.3 million shares of CoreWeave worth about $3.96 billion.

CoreWeave, founded in 2017, rents out access to Nvidia graphics processing units that power AI model training. The firm went public in March in what was the largest U.S. venture-backed tech IPO since 2021. Leading up to its debut, it raised billions in debt and equity financing, including from Nvidia itself.

The stock surged roughly five-fold shortly following its April IPO, but subsequently lost about 50% during the summer. They’ve rebounded by about 35% since Labor Day.