Barclays fixed income analyst Sandeep Gupta wrote a research report this week discussing something important about Nvidia (NVDA) that NIA first discussed several months ago.
According to his report:
"Though the total amount of funding and the specific structure of the deals (cash, stock, tech, or services) are unknown, Nvidia has become linked with a host of companies that we expect are using Nvidia technology. CoreWeave, a Nvidia-backed cloud computing startup not only uses Nvidia chips but has secured $2.3bn in financing using Nvidia H100 GPUs as collateral. This financing will be used to purchase more advanced chips, most probably from Nvidia. It is estimated that CoreWeave was Nvidia’s 7th largest customer of H100 GPUs in 2023, purchasing 40k of the processors for 4.5% of total revenues (an H100 GPU sells for $30k). Meta and Microsoft tied for number 1 at 150k each.
The core takeaway is that an increasing share of NVDA’s revenues from the past two quarters can potentially be attributed to startups NVDA has funded itself. These companies operate in robotics, machine learning, SaaS, and cloud computing, all sectors reliant on AI chips. This self-funded demand is a risk because it is dependent on NVDA’s own investment spending and potentially misinterprets independent demand for NVDA chips because NVDA is essentially funding its own customers."
Preparing Americans for Hyperinflation
