CoreWeave Inc. (NASDAQ:CRWV) CEO Michael Intrator has firmly dismissed allegations of “circular financing” with Nvidia Corp. (NASDAQ:NVDA), calling such claims “ridiculous” and lacking mathematical basis.
In a recent appearance on the Big Technology Podcast, Intrator addressed concerns surrounding Nvidia’s minority investment in CoreWeave, which allegedly serves to artificially inflate demand for its chips. He characterized these worries as trivial, in a way likening them to a “fly on the b*** of the elephant,” emphasizing the disparity in scale between Nvidia’s investment and CoreWeave’s operations.
Intrator pointed out that while Nvidia has invested approximately $300 million in CoreWeave over two funding rounds, the specialized cloud provider has raised an impressive $25 billion in total capital, boasting a valuation of $42 billion. “I’m pretty sure that they don’t think of their investment of $300 million as the secret sauce to standing up the largest company in the world,” he noted, asserting that the relationship is more about a significant market imbalance where the demand for computing power exceeds supply, rather than any financial manipulations.
The CEO also tackled concerns about CoreWeave’s ambitious use of debt to support its rapid growth. He explained the company’s strategy of utilizing special purpose vehicles or “boxes” designed to mitigate risk. Under this framework, revenue generated from investment-grade contracts—such as those with Microsoft Corp. (NASDAQ:MSFT) and Meta Platforms Inc. (NASDAQ:META)—is secured in a restricted account. This setup ensures that operating expenses and lender payments are prioritized before any profits are allocated to CoreWeave.
Further addressing apprehensions about the durability of AI hardware, Chief Strategy Officer Brian Venturo revealed a recent contract renewal for older Nvidia A100 chips at 95% of their initial value, indicating a commitment to maximizing the efficiency of existing resources.
Intrator’s insights paint a picture of CoreWeave as a resilient player in the tech industry, focused on sustainable growth through prudent financial practices and innovative strategies. This positions the company well in an increasingly competitive market, providing a positive outlook for its future.