Gurley realizes NVIDIA needs multiple large system companies like CoreWeave to maximize its competitive advantage.
“Like like like if if the biggest systems are where the biggest competitive advantage is, you need as many of these big system companies as you can possibly have.”
Gurley reports NVIDIA promised to buy any unsold CoreWeave capacity, calling this commitment unusual and debt-enabling.
“That is very unusual. That's not the same as making an investment. That could easily help CoreWeave with their debtors and and getting more debt financing.”
Gurley warns investors cannot assess real CoreWeave demand since NVIDIA's backstop obscures slowdown signals.
“And if you just said to me, what would you look for to see if we've, you know, kind of reached a point where things are slowing a little bit?”
Gurley warns NVIDIA backstop obscures real demand signals for CoreWeave from investors.
“That could easily help CoreWeave with their debtors and and getting more debt financing. But it also means as a investor, we we don't know what's going on with real demand for CoreWeave because we probably won't be told if they start moving into the world where they're offloading to NVIDIA or not.”
Gurley questions Nvidia's contract guaranteeing to buy CoreWeave's excess capacity as abnormal business practice.
“But then they wrote a contract with CoreWeave, which said if CoreWeave ever has extra capacity, we'll buy that capacity, which presumably helps it get more debt financing, that kind of thing.”