CoreWeave surges 10% on Nvidia's $2 billion AI factory investment
Partnership targets 5 GW of AI computing capacity by 2030 as chipmaker deepens infrastructure bet
CoreWeave shares surged more than 10% on Monday after Nvidia announced a $2 billion equity investment in the cloud infrastructure provider, deepening a partnership aimed at building massive AI computing facilities across the United States.
The investment, which purchased CoreWeave Class A common stock at $87.20 per share, represents a significant endorsement from the world's most valuable chipmaker as it seeks to expand the physical infrastructure needed to support the artificial intelligence boom. The stock climbed to $101.86 in afternoon trading, marking its strongest single-day performance in months.
At the heart of the partnership is an ambitious plan to develop and operate more than 5 gigawatts of AI factory capacity by 2030. These specialized facilities, built around Nvidia's accelerated computing platforms, would provide the massive computing power required for training and running increasingly sophisticated AI models. For context, 5 gigawatts is roughly equivalent to the electricity consumption of a mid-sized American city.
"NVIDIA and CoreWeave are deepening our collaboration to meet exponentially growing demand for AI compute," according to the joint announcement. "This expanded collaboration will accelerate the buildout of AI factories that CoreWeave will develop and operate utilizing NVIDIA's accelerated computing platform technology."
The terms of the deal extend beyond capital. Nvidia has committed to help CoreWeave secure the land, power, and shell infrastructure required for these massive facilities—a critical component in an era where data center construction is often constrained by electrical grid capacity and zoning approvals. The company will also test and validate CoreWeave's SUNK and Mission Control platforms for potential integration into Nvidia's reference architectures.
For CoreWeave, a New Jersey-based company that specializes in cloud infrastructure for generative AI applications, the partnership provides both capital and credibility. The company reported trailing twelve-month revenue of $2.7 billion but remains unprofitable, with earnings per share of negative $2.53. The market has rewarded its growth prospects, however, with shares trading at 22 times revenue despite the company's unprofitability.
Analysts view the investment as a strategic move by Nvidia to secure dedicated capacity for its graphics processing units, which remain in short supply as AI companies race to build larger language models and other AI applications. By investing directly in infrastructure providers, Nvidia can ensure its chips have the physical facilities needed to operate at scale.
"This is about Nvidia locking in demand for its GPUs," analysts noted in coverage of the announcement. "The AI factory model creates a vertically integrated stack that could give Nvidia an advantage in the infrastructure wars."
The deal comes amid a broader rush to build dedicated AI infrastructure. Microsoft, Google, and Amazon are all investing tens of billions in data center capacity, while specialized players like CoreWeave have emerged to focus exclusively on AI workloads. The partnership positions CoreWeave as a key player in this ecosystem, with Nvidia's backing providing both capital and technical expertise.
However, the investment arrives at a challenging moment for CoreWeave. The company's stock has experienced significant volatility, with a 52-week range of $33.52 to $187.00—reflecting both the enormous enthusiasm around AI infrastructure and concerns about the company's path to profitability. Analysts maintain a price target of $84.91, below Monday's trading price, suggesting some caution about the valuation.
Additionally, multiple law firms announced securities class action lawsuits on Monday, alleging the company made misrepresentations about its infrastructure. The legal challenges, which relate to statements made between March 28 and December 15 of last year, could create uncertainty for investors even as Nvidia's endorsement provides a vote of confidence.
For Nvidia, the investment represents a relatively small but strategic bet—the $2 billion outlay is modest for a company with a market capitalization exceeding $3 trillion. Yet it underscores the chipmaker's determination to control every layer of the AI stack, from chips and software to the physical infrastructure that powers them all.
The 5 GW target is particularly aggressive given the current state of AI infrastructure. Typical hyperscale data centers today operate in the range of 50 to 100 megawatts, meaning CoreWeave and Nvidia are aiming for facilities 50 to 100 times larger than current industry standards. Achieving this goal would require overcoming significant challenges in power procurement, cooling technology, and grid connectivity.
As AI adoption accelerates across industries, demand for specialized computing infrastructure is expected to grow exponentially. The partnership between Nvidia and CoreWeave represents one of the most ambitious attempts to meet that demand, with both companies betting that the race to build AI factories will define the next phase of the technology revolution.