Nvidia has built an empire on circular deals for chips. Can anything knock it down?

“Nvidia has plowed plenty of money into the AI space, with more than 70 investments in AI companies just this year, according to PitchBook data. Among the billions it’s splashed out, there’s one important category: neoclouds, as exemplified by CoreWeave, the publicly traded, debt-laden company premised on the bet that we will continue building data centers forever. CoreWeave and its ilk have turned around and taken out debt to buy Nvidia chips to put in their data centers, putting up the chips themselves as loan collateral — and in the process effectively turning $1 in Nvidia investment into $5 in Nvidia purchases. This is great for Nvidia. I’m not convinced it’s great for anyone else.” - Elizabeth Lopatto, The Verge

neXt Curve take:

The topic of AI system depreciation keeps coming up, and rightfully so. As we heard from Marvell Technologies and their partners at Marvell Industry Analyst Day 2025 earlier this month, AI systems on the scale-in, scale-up, scale-out are looking at a 12 to 18 month replacement cycle. It is important to understand this obsolescence dynamic is largely specific to AI supercomputing which has impact on neocloud economics, which are very different from traditional cloud/data center economics.

It’s also important to understand that the data center architecture, including cooling, power distribution is evolving quickly as well, signifying the need for AI system-specific data center retrofit. See our key takes from OCP Global Summit 2025 and HotChips 2025 on our neXt Curve chat for more insights.

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