Nvidia Faces Exposure as CoreWeave Stock Plummets
Nvidia faces potential financial instability as its investment in cloud provider CoreWeave declines amid reports of a liquidity crisis and circular financing.
Financial stress at cloud infrastructure provider CoreWeave has created significant exposure for Nvidia Inc., which serves as both a primary hardware supplier and a major investor. CoreWeave's stock fell 15% on Wednesday and another 7% on Thursday, sparking concerns that a collapsing share price could trigger a liquidity crisis and a self-reinforcing downward spiral.
Nvidia holds approximately 10% of CoreWeave, owning 47.2 million shares following a $2 billion investment in January 2026. This followed an earlier $250 million investment to rescue a downsized IPO. In exchange for this capital, CoreWeave committed to building over 5 gigawatts of AI factories using Nvidia technology by 2030.
Investor pressure is mounting for CEO Jensen Huang to address the sustainability of AI data center demand. Analyst Tal Liani suggests Nvidia may be using circular financing to fund deals with CoreWeave and other hyperscalers to block competitors like AMD, implying that a portion of Nvidia's own business demand is self-funded. Huang has not yet issued a public statement regarding the health of the partnership.
