Huang Tells Investors CoreWeave Finances Improve as AI Debt Fears Hit Markets

Nvidia CEO Jensen Huang told investors in Stockholm on October 15 that CoreWeave's financial condition is improving every day, and said in Berlin the next day that the AI market turmoil will pass, according to aitimes.com. The remarks came as concerns over AI cloud debt weighed on markets.

Nvidia holds about 10% of CoreWeave and invested a further $2 billion in the company in January of this year. For the quarter ending in July, 45% of Nvidia's data center revenue came from customers other than large cloud providers. As of that quarter, Nvidia's guarantees and computing capacity purchase commitments for its data center business totaled up to $164.5 billion.

Nvidia has invested or committed more than $7 billion in AI cloud companies, including Nebius and Nscale. The Wall Street Journal reported on October 20 that Nvidia has strong economic reasons to rescue CoreWeave if its business model falters, even though Huang has publicly said no additional rescue support is needed.

Neocloud Consolidation Concerns

The Information reported on October 18, citing industry executives, that only 7 to 10 of the hundreds of neocloud companies may survive in a few years. According to the Financial Times, derivatives trading against default risk of major tech companies rose from under $2 billion a week in July to over $9 billion in September.

Nvidia is reportedly discussing an additional investment of hundreds of millions of dollars in Australian neocloud company Firmus, which withdrew its IPO earlier this month.