CRWV is NVDA's ICBM Pointed At The Hyperscalers

Bryce here. I have a quasi-conspiracy theory: CoreWeave is Jensen Huang's nuclear ICBM aimed at none other than his largest customers: the hyperscalers (Amazon, Google, Microsoft, and Meta).

Cody and I had thought, along with everybody else, that CoreWeave seemed fishy. Most analysts also though that the company's cozy relationship with Nvidia is a red flag, but after Cody told me that we should step back and check our premise, I think most analysts are actually missing the forest for the trees. Most analysts think this is a case of Nvidia simply round-tripping revenue (like everyone remembers from the dot com days with companies like Lucent and Nortel – Cody has some great stories about those days). Most analysts also think that Nvidia is juicing its sales by investing in CoreWeave and then having CoreWeave use lots of leverage to buy lots of Nvidia chips. But Jensen's way too smart for that. As I explain below (and to use a very cliche analogy at this point), I think the hyperscalers are playing checkers while Nvidia is playing chess, and I think CoreWeave is a relatively important piece – probably at least a rook or a knight – in Jensen's multi-trillion-dollar AI chess game.

Here's how it goes.