Nvidia, CoreWeave, Nebius: The Circular Financing Behind the GPU Boom
Original: Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom
Why This Matters
The neocloud model is central to AI infrastructure scaling, but its debt-heavy, circular financing structure poses systemic risk to the broader GPU buildout cycle.
Neoclouds CoreWeave and Nebius are driving AI infrastructure expansion backed by over $145B in hyperscaler commitments from Microsoft, Meta, OpenAI, and Anthropic. However, both companies carry soaring debt loads, limited cash flow, and rely on circular financing structures involving Nvidia equity and GPU-backed debt.
CoreWeave and Nebius have emerged as the two leading public neoclouds, differentiating themselves through rapid access to the latest Nvidia GPUs and optimized compute utilization. Each company has secured 3.5 GW of contracted power capacity, though most has yet to come online. CoreWeave targets 1.7 GW of active power by end of 2026; Nebius targets 800 MW to 1 GW.
Hyperscaler commitments backing these buildouts are substantial. Microsoft has committed approximately $60B across CoreWeave, Nebius, and private players such as Nscale. Meta committed $35.2B to CoreWeave and up to $27B to Nebius, totaling up to $62.2B. Microsoft and Meta's combined commitments reach $122.2B — roughly 90% of AWS's trailing twelve-month revenue — allocated toward neocloud capacity deals. Including OpenAI and Anthropic commitments, total potential obligations exceed $145B.
Despite these partnerships, financial strain is evident. CoreWeave's FY2026 estimated revenue is $12.6B and Nebius FY2026 revenue is projected at $3.4B — far below the scale of committed deal values. Analyst Beth Kindig of I/O Fund highlights that neoclouds lack the cash flow profiles of Big Tech and are employing circular financing structures, including Nvidia's equity investments and GPU-backed debt, to fund infrastructure buildouts. The bearish case centers on hyperscalers using neoclouds to shift capital expenditure to operating expenses, raising questions about the long-term durability of neocloud growth.