"Nvidia ( NASDAQ:NVDA ) owns a growing portfolio of strategic equity investments in companies supporting the broader artificial intelligence (AI) ecosystem, which is not widely discussed among retail investors. This portfolio has expanded in recent years to focus on stakes in AI infrastructure providers such as CoreWeave ( NASDAQ:CRWV ), Nebius Group ( NASDAQ:NBIS ), and Applied Digital ( NASDAQ:APLD ) that align with Nvidia's goals of expanding data center capacity and GPU utilization for AI workloads."
"Ecosystem Support Amid Rising Risks Nvidia's investments aim to support its core AI business by backing companies that drive demand for its GPUs. Through direct equity stakes and its venture arm NVentures, Nvidia has built positions in public companies like CoreWeave, its largest holding currently valued around $1.6 billion, alongside Nebius Group and Applied Digital. These infrastructure-focused companies provide cloud and data center services that rely heavily on Nvidia hardware, helping expand the market for AI training and inference."
"However, this approach has become a growing source of analyst criticism due to the appearance of circular financing. That is where Nvidia invests in customers who turn around and purchase its chips, giving the appearance of artificially inflating organic AI chip demand. Analysts have drawn parallels to vendor financing practices during past tech bubbles, noting that such interconnected deals could mask underlying weaknesses if AI spending slows."
Nvidia holds a growing portfolio of strategic equity investments in companies that support AI infrastructure to expand data center capacity and increase GPU utilization. Holdings include stakes in CoreWeave, Nebius Group, Applied Digital, and a $2 billion stake in Synopsys to integrate accelerated computing with EDA tools. Investments are executed through direct equity positions and the NVentures arm to deepen ties with cloud and data center providers that consume Nvidia hardware. Analysts warn the strategy can appear as circular financing, where invested customers purchase chips, potentially inflating demand and obscuring risks if AI spending slows.
Read at 24/7 Wall St.
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