Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom
io-fund.com
July 11, 2026
21 min read
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53/100
Summary
Neoclouds are experiencing significant hyperscaler demand as companies accelerate AI infrastructure scaling, leading to substantial revenue and backlog growth. CoreWeave and Nebius provide access to the latest Nvidia GPUs while optimizing compute utilization, despite concerns about hyperscalers offloading their capital expenditures.
Key Takeaways
- Neoclouds like CoreWeave and Nebius are experiencing significant growth in revenue and backlog due to high demand for AI infrastructure from hyperscalers.
- Microsoft and Meta have committed over $122 billion to neocloud partnerships, significantly exceeding the current revenues of these companies.
- CoreWeave and Nebius have each secured 3.5 GWs of contracted power capacity, but most of this capacity has yet to be activated.
- Neoclouds are utilizing circular financing structures to manage their growth amid high debt and limited cash flow, raising concerns about their long-term sustainability.
Community Sentiment
Positives
- Nvidia's investment in CoreWeave is a strategic move to hedge against hyperscalers, ensuring competition and securing GPU supply — a smart play in a rapidly evolving market.
- The financial backstop from Nvidia for unsold GPU capacity shows a commitment to supporting its partners, which could lead to more robust infrastructure for AI applications.
Concerns
- The whole ecosystem is bleeding cash, with investors throwing money at anything labeled AI — this feels more like a bubble than a sustainable model.
- Concerns are growing that circular financing could mirror the toxic asset crisis of 2007, jeopardizing the economy if these investments don't yield real returns.
- Skeptics argue that the current funding model is unsustainable; what happens when companies run out of debt or funds without achieving profitability?
