CoreWeave says Nvidia has its back on data center financing
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- A CoreWeave executive told analysts in a call that Nvidia could guarantee its data center leases.
- The arrangement adds to the financial support from the chip giant as CoreWeave spends heavily.
- CoreWeave's spending on AI infrastructure is expected to more than double in 2026.
In a call with analysts late last month, a CoreWeave executive said it will use Nvidia as a guarantor of its lease payments in order to help secure financing for the buildout of data centers it will occupy, an analyst who listened to the call told Business Insider.
Alex Platt, a research analyst at D.A. Davidson who covers CoreWeave, said that a company executive likened the arrangement to a recent guarantee Google had extended to a partner to allow construction financing to be raised for a data center Google will occupy.
The guarantee of lease payments would be another major line of financial support from Nvidia to help CoreWeave manage the immense costs of building artificial intelligence infrastructure. The chipmaking giant has also purchased billions of dollars of CoreWeave shares and, last year, agreed to buy up to $6.3 billion of CoreWeave computing capacity if CoreWeave is unable to sell it to clients.
CoreWeave's disclosure to analysts that Nvidia would assist in bankrolling its ambitious data center buildout came on the day that the two companies announced that Nvidia had bought $2 billion of CoreWeave stock and would "accelerate" CoreWeave's goal of rapidly scaling its artificial intelligence computing portfolio.
"In addition to continuing to procure our own capacity, CoreWeave will selectively partner with NVIDIA and leverage NVIDIA's financial strength to accelerate our procurement of land, power, shell, to try to better keep pace with demand," a spokeswoman for CoreWeave told Business Insider when asked about the analyst call. "This could take several forms like credit enhancement, joint developments, etc., but will be determined based on the specific opportunity at that point in time."
The spokeswoman added that support from Nvidia or other partners "should not be interpreted as the primary mechanism through which CoreWeave accesses capacity, nor as an indication that the company is unable to procure infrastructure independently."
The potential lease backstop from Nvidia shows how CoreWeave, a leader in the race to build out AI infrastructure, is marshaling the financial heft of business partners as it confronts immense costs. Moody's has forecast that CoreWeave could spend more than $30 billion on capital expenditures in 2026, more than double its expected outlay in 2025.
Platt said that the news of Nvidia's deepening commitment had initiated a "pretty stark shift in sentiment" among investors.
"If you were asking me about CoreWeave three months ago, I'd say that sentiment was pretty low," Platt said. "I think now we're actually going to see sentiment around CoreWeave shift drastically to the positive side from investors."
Last week, Business Insider reported that efforts in recent months to raise third-party construction financing for a data center that will be leased by CoreWeave in Lancaster, Pennsylvania, had been unsuccessful. Blue Owl, a major lender and investor in the data center development boom, disclosed that it had extended a $500 million short-term loan to the project that expires in March; it did not say how the $4 billion project would be financed beyond that.
A lender familiar with the project's solicitations for construction financing told Business Insider that Blue Owl had been seeking about $1.4 billion in loans.
CoreWeave stock fell after Business Insider's Friday report by as much 12% but has since rebounded.
A CoreWeave spokeswoman told BI after its story was published that the Lancaster project "is fully funded, under construction, and moving forward as planned."
"It's standard practice for capital allocators to evaluate a range of financing options when managing large-scale infrastructure projects, particularly in high-growth, capital-intensive sectors like AI," the spokeswoman said. "There has been no change to the project's timeline."
It was not immediately clear if CoreWeave would seek to have Nvidia guarantee some or all of its lease payments to the Lancaster development. Such a backstop from the world's largest publicly traded company would likely make it easier to attract lenders and also potentially reduce borrowing costs based on Nvidia's strong credit rating.
On Wednesday, Bloomberg reported that CoreWeave was arranging $8.5 billion of financing from a group of lenders, including Morgan Stanley and MUFG, based on customer contracts it has with Meta, in another example of how CoreWeave is leveraging its ties to some of the world's wealthiest companies to raise cash.
Morgan Stanley and Mitsubishi UFJ Financial Group declined to comment to Business Insider on the potential financing deal.
All eyes on earnings
Platt said that a CoreWeave executive on the call said that Nvidia's plans to backstop CoreWeave data centers would be similar to an arrangement Google has with Fluidstack. In September, it was announced that Google would guarantee almost half of Fluidstack's lease payments for a Texas data center that Fluidstack will rent and Google will occupy. Like CoreWeave, Fluidstack is a so-called neo-cloud company that procures, builds, and operates AI infrastructure and computing and then leases it to customers.
CoreWeave announces its fourth-quarter earnings for 2025 on Thursday. The rate at which it is spending money on AI infrastructure and the growth of its portfolio will be two closely watched measures of whether the company is scaling at the rate it has forecast to capitalize on the huge market opportunity it has touted.
The company previously stated it would end 2025 with 850 megawatts of operating data center facilities, according to a January research report by Deutsche Bank. A Morgan Stanley report on February 20 stated that "easing investor concerns" would depend, in part, on delivering that capacity. CoreWeave had 590 megawatts of power online at the end of the third quarter, according to Morgan Stanley. The report projects that CoreWeave's debt will grow to $38 billion by the end of 2026 as it spends to build. At the end of the third quarter, the company reported roughly $14 billion of debt at an average interest rate of around 10%.
While CoreWeave's mounting debt has highlighted the risks involved in the AI buildout, the company has said that's outweighed by the huge revenues it will generate from the facilities it leases and builds out. At the end of the third quarter, the company reported a $55.6 billion backlog of contracted revenue, according to Moody's — rent that it can begin collecting when it builds and delivers its AI facilities to those customers.
Steven McDonald, a director at S&P Global Ratings, said that if CoreWeave is successful in scaling fast and realizing that contracted revenue, its credit rating could rise, lowering the cost of its borrowing and increasing profitability. S&P has assigned CoreWeave a below-investment-grade rating of B+ with a "stable" outlook.
"They've kind of outperformed at a high level against a lot of the things that we were initially looking at, whether it be the customer concentration, access to power," McDonald said. It "is carving out a role as a player in the AI data center space. The relationship with Nvidia seems like it's going well, if not strengthening, and those are things that will factor favorably in our credit analysis."
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