Shares of CoreWeave popped 12% on Monday after Nvidia announced it has invested $2 billion in the artificial intelligence infrastructure provider.
Nvidia purchased CoreWeave Class A common stock at $87.20 per share, according to a release, a discount from Friday’s closing price of $92.98. The investment will help CoreWeave accelerate its buildout of “5 gigawatts of AI factories by 2030,” the companies said.
“This deal allows us to accelerate our build, which will lead to continued diversification and reducing dependency on any particular client as we scale into this additional data center capacity,” CoreWeave CEO Mike Intrator told CNBC’s “Squawk on the Street” on Monday.
A gigawatt is a measure of power that’s becoming an increasingly common metric for describing AI data center capacity. Five gigawatts is roughly equivalent to the annual power consumption of 4 million U.S. households, according to a CNBC analysis of data from the Energy Information Administration.
“The thing to remember is we’ve invested $2 billion into CoreWeave, but recognize that the amount of funding that needs to be raised yet to support that five gigawatts is really quite significant,” Nvidia CEO Jensen Huang told CNBC during the interview. “We’re investing a small percentage of the amount that ultimately has to go and be provided.”
CoreWeave primarily generates revenue by building and renting out data centers that are full of Nvidia’s graphics processing units, which are key for training models and running large AI workloads. The company, which some investors have classified as a “neocloud,” has become a crucial player in an increasingly interconnected web of AI infrastructure partners.
Prior to Monday’s announcement, Nvidia was already a major CoreWeave backer.
In September, CoreWeave disclosed an order worth at least $6.3 billion from Nvidia in a filing with the U.S. Securities and Exchange Commission. Nvidia has an obligation to buy the “residual unsold capacity through April 2032, according to the agreement.
CoreWeave went public on the Nasdaq in March, and the company raised billions of dollars in debt and equity, including from Nvidia.
“We’re in the beginning of the AI infrastructure build-out, and the demand is just extraordinary,” Huang said on Monday.
As AI startups race to build out their computing infrastructure, CoreWeave has been on a deal-making blitz. The company announced in September that it agreed to provide Meta with $14.2 billion of AI cloud infrastructure, just days after expanding its contract with OpenAI to $22.4 billion.
But CoreWeave’s stock has been shaky in recent months as some investors worry that the company is taking on high levels of debt to finance those multibillion-dollar deals.
Intrator told CNBC earlier this month that AI will eventually be embedded into “absolutely everything we do” and that the technology will “continue to pay dividends over the next 100 years.”
“What you’re seeing is the base-load infrastructure being built right now at what has historically been a pace that wasn’t even considered,” he said. “Companies like CoreWeave, and there are others, are out there building the infrastructure to be able to deliver that for these clients.”
PRO: Watch CNBC’s full interview with Nvidia CEO Jensen Huang and CoreWeave CEO Mike Intrator
