Nvidia and CoreWeave: Circular GPU Financing Under the Microscope

What Happened

IO Fund published an analysis of GPU ecosystem financing. Nvidia provides financing or warrants to companies like CoreWeave and Nebius, which use these funds to purchase Nvidia GPUs. The result is a circular accounting structure where Nvidia reports sales, but actual cash flows are more complex.

How It Works

1. Nvidia invests/finances CoreWeave
2. CoreWeave buys Nvidia H100/H200 GPUs for billions
3. CoreWeave rents GPU capacity to AI companies
4. Nvidia records the sale as revenue

Why It Matters

Critics argue this structure artificially inflates Nvidia revenues and creates systemic risk — if AI demand slows, the entire pyramid could collapse. The SEC and investors are watching.