I just wrote about CoreWeave coming under stress today here:
What I left out is that there’s also an enormous game-theory problem developing here for Nvidia, one that I think could have implications far beyond CoreWeave. I wanted to explain.
If CoreWeave is genuinely headed toward financial distress, we may not have to wait for the company to actually start defaulting on its debt to find out. The equity market could effectively make that decision first, as a collapsing share price undermines confidence, restricts financing options, and potentially sets off a self-reinforcing downward spiral.
The business doesn’t automatically disappear because the stock collapses, but for a company this dependent on outside capital, an equity meltdown could accelerate a liquidity crisis considerably.
And that raises an extraordinary question: would Nvidia be dumb enough to bail out CoreWeave again? Or, more importantly, could it find itself in a position where it feels it has no choice?
Remember, Nvidia already helped rescue CoreWeave’s downsized IPO with a $250 million investment order, something I wrote about extensively at the time.
It subsequently deepened its financial relationship with the company through another multibillion-dollar investment. Nvidia isn’t simply an outside shareholder here. It’s the supplier of the very hardware CoreWeave borrows billions to purchase, making the two companies’ financial interests unusually intertwined.
And now the stakes are considerably higher. Consider this…
