CoreWeave, a specialized cloud provider, has managed to receive $2.3 billion in funding by using NVIDIA's highly-demanded H100 GPUs as collateral.
NVIDIA's H100 GPUs Have Now Become a Financial Resource With Growing Demand and Limited Supply
The AI industry has been witnessing rapid expansion, and the demand from the sector has reached new levels, which is why companies like CoreWeave are giving them all to expand their existing facilities. It is said that the company intends to meet the "rising AI workload" through colossal funding. The lenders of the amount include Coatue, DigitalBridge, BlackRock, PIMCO, and Carlyle. For those unfamiliar with the term "collateral", it gives in a financial asset as a security of the acquired debt, which is NVIDIA's H100 GPUs.
The astonishing fact about this report is that NVIDIA's H100 AI GPUs are being used as a "collateral" asset, which shows the importance and value of these GPUs. $2.3 billion worth of H100 GPUs isn't easy to acquire, and you might be wondering how CoreWeave got such an amount in the first place. While the answer is simple yet interesting. CoreWeave has gained "exclusive" support from NVIDIA regarding getting necessary equipment, including H100 GPUs and HGX H100 supercomputers. You can categorize these items as the "holy grail" in the industry.
CoreWeave is ahead of its CWS competitors, such as Google and Microsoft, mainly due to the benefits of a "private" relationship with NVIDIA. The AI fiasco where one place has brought innovation and automation, but it has also disrupted the balance in the industry since AI requires immense computational capabilities, which, in this case, NVIDIA offers for now. We can say that success in the industry now directly lies in the company's relationship with NVIDIA.
CoreWeave's CEO, Michael Intrator has also expressed his opinion on acquiring the debt, claiming that gaining the debt through an "asset base" is much more cost-efficient and easier. The company plans to manufacture a state-of-the-art data center facility in Texas, with plans of rapid expansion across the US.
Summing up, it is said that the AI industry has taken a new shift, with NVIDIA taking the spotlight for now. Using GPUs as a collateral asset now tells us how significant things have gotten, and as a journalist note, we believe there is a dire need to break the monopoly. AMD has expressed its desire to break NVIDIA's dominance in Chinese markets through a cut-down "MI300" AI accelerator, but will that do the job? The future holds plentiful for consumers and businesses, and we can't wait to see how the industry evolves.
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