Is there real cause for concern about Nvidia’s partnership with CoreWeave?
The partnership generated a "mini firestorm on Twitter" as a conspiracy theory on social media alleged Nvidia’s results were being propped up by a “shell” company, CoreWeave. CoreWeave is oddly run by Wall Street-types with limited experience in building a GPU cloud platform using Nvidia’s highly sought-after chips. Joseph questions what a group of traders and portfolio managers brings to the table for a company as in demand as Nvidia.
“It’s really weird that Nvidia and Microsoft Azure would get so deeply involved with them," Tech analyst Ami Joseph explains in The Call @ Hedgeye. "Why them of all partners to choose? It just seems like a bad choice of partner. There's some sort of smell around it."
However, Joseph is quick to point out… “I don’t think Nvidia has any incentive to go to jail. They are certainly not desperate for buyers. There is a shortage of GPUs out there and they could sell these things to anyone,” continues Joseph. “If you remove CoreWeave as a customer, my guess is Nvidia’s year is just fine, and there’s no real change in the direction.”
“Is AI the future? Absolutely, I think it is," Joseph concludes. "Are we in this kind of little over-fueled bubble potentially? Absolutely.”
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