Core Weave and Nvidia ink $6.3 billion deal for cloud computing capacity

The last week has been marked by significant news in the global markets, particularly in the infrastructure of artificial intelligence (AI) and electric vehicles (EVs). Core Weave agreed to a $6.3-billion-dollar order with Nvidia, as well as the introduction of a program of new ventures and AI startups. At the same time, BYD, the leading Chinese EV manufacturer, missed out on a huge stock wipeout of $45 billion due to increasing competition and declining demand. Meanwhile, the competition among trillion-dollar companies is ongoing, with Nvidia, Microsoft, Apple, and Google controlling the entire world market.

These happenings indicate that AI and EVs, the two most rapidly expanding sectors of the last ten years, are moving into a new phase of maturity. While AI framework creators are ensuring demand longevity through partnerships, EV manufacturers are facing the reality of price wars and product exhaustion.

Core Weave reaches a $6.3 billion backstop with Nvidia.

A new company in the AI cloud infrastructure, CoreWeave, has entered into a $6.3 billion deal with Nvidia. The agreement is in the form of a guarantee, where Nvidia has agreed to buy all unused cloud capacity at CoreWeave by April 2032.

This is important for two reasons. First, it enhances the position of CoreWeave as a key Nvidia partner. Nvidia plans and markets GPUs, the most vital chips to train and execute AI models. This could secure supply by locking in future AI growth, guaranteeing that CoreWeave’s capacity will be utilized regardless of the number of customers the company may acquire.

Second, the transaction protects CoreWeave against risk. It is very expensive to construct and maintain AI data centers. The company may face financial pressure if customer demand is low. CoreWeave will also have stability and credibility in the market with Nvidia as a sure buyer.

CoreWeave stock increased by approximately 8% following the declaration. Analysts reckon that this action will calm down investors who were concerned that CoreWeave relied heavily on its two largest clients, which are Microsoft and OpenAI.

Core Weave Broader Strategy Ventures Initiative.

In addition to the Nvidia acquisition, CoreWeave also revealed that it is establishing a program called CoreWeave Ventures that will provide support to AI startups. It will offer capital, technical assistance, and even compute-for-equity transactions, enabling startups to reach highly advanced GPU infrastructure without incurring excessive startup expenses.

This action underscores the desire of Core Weave to develop a wider ecosystem. Investing in early-stage AI companies provides two key benefits to CoreWeave: CoreWeave can help startups grow, and most importantly, provide early access to breakthrough technology. Such budding companies may become their customers, partners, or acquisition subjects in the future.

But CoreWeave is financially challenged, too. In its recent report, the company disclosed that its operating expenses had almost doubled or tripled to $1.19 billion. The pace at which infrastructure is being expanded demands huge expenditure, and the long-term profitability may not be assured.

Competition is also rising. Competitors such as Nebius Group and Microsoft are scaling their AI infrastructure. Examples include Nebius, who signed a $17.4 billion GPU supply contract with Microsoft, and has a capacity of 1 gigawatt by 2026. This implies that CoreWeave will have to strike a balance between its rapid expansion and financial viability.

BYD is experiencing a $45 billion wipeout: the EV Price War Bites Back

BYD, the largest EV producer in China, is not coping well on the other side of the market. The low sales target of $4.6 million vehicles to $5.5 million vehicles by 2025 lowered the market value of the company by approximately $45 billion.

It has been associated with a ferocious EV price competition in China. In recent years, Chinese car manufacturers have been reducing their prices as a way of increasing market share. BYD was ahead of this trend, but currently the strategy is backfiring. June-quarter profit declined 30% at the firm, the first fall in over three years.

Investors are losing trust in BYD’s over-dependence on discounting. Analysts contend that this will damage margins and pose a long-term risk, particularly because Beijing has started to interfere in what it believes to be destructive competition. Governments are concerned that excessive price cutting is harming profitability and China’s manufacturing image in the international market.

To compound the situation, the BYD product lineup has started to appear dated. New entrants, such as Geely and Leapmotor, are introducing models that are more appealing to customers. BYD has also delayed some of its new launches to early 2026 in the hopes of re-energizing itself.

The case demonstrates how fast the leadership in the market could change. BYD has become a worldwide success story, overtaking Tesla in sales; however, it is now finding it challenging to maintain its expansion.

Trillion-Dollar Companies: Nvidia, Microsoft, Apple, and Google are on the List

Although CoreWeave and BYD have entirely different problems, the other narrative that can be traced in the backdrop is the emergence of trillion-dollar companies.

The company that drives a huge portion of the AI boom, Nvidia, is now estimated to be worth approximately $4.3 trillion, placing it as the priciest enterprise globally. It was only two years earlier that it topped the $1 trillion mark. Its fiscal 2025 revenue exceeded $130 billion, and the demand for its AI chips still outpaces supply.

The second company on the list is Microsoft, valued at 3.8 place, supported by its software operations and powerful presence in AI due to its investment in OpenAI. Apple is a global giant in consumer technology, and it generated $391 billion in revenue in fiscal 2024. Now, advertising and AI investments have enabled Google-parent Alphabet to cross the 3 trillion thresholds.

The key point is that nine of the ten trillion-dollar companies are tech firms. Berkshire Hathaway is the only exception under Warren Buffett. This focus explains why technology is at the core of the world’s markets, and AI is propelling recent growth.

Artificial Intelligence and Electric Vehicles: Two Technology Industry Directions

Comparing the two companies, CoreWeave and BYD, a significant difference can be observed.

The AI infrastructure is at an early stage of development. Computing power is in high demand due to the increasing adoption of generative AI and cutting-edge machine learning by companies. Despite stiff competition and high prices, other firms, such as CoreWeave, are securing large long-term contracts that provide them with stability.

EVs are, however, entering a more difficult phase. The market is becoming saturated after several years of its explosive growth. Price competition, government regulation and product staleness are decelerating the pace. To continue growing, companies now require more differentiation, creative designs, and improved profitability plans.

Investor Takeaways

To the investors, the new events hold both good and bad news.

Core Weave: Nvidia acquisition is stable, yet excessive expenditure is a problem. Its new ventures arm may become viable in the long run, provided that it manages to develop a pipeline of innovative AI firms.

Nvidia: It is the obvious AI leader with a $4.3 trillion valuation. The dominance is guaranteed by its approach of partnering with cloud providers, such as CoreWeave, to ensure dominance in the years to come.

BYD: The selloff is considered to be an actual risk. Its short-term prospects are not strong without new models and additional pricing discipline. Nevertheless, it may revive itself if it manages to refresh its lineup in 2026.

Trillion-dollar tech giants: So many technology firms dominating the global rankings tell us where capital and innovation can be found. The popularity of AI-based businesses among investors remains high compared to traditional industries.

Assumption

Two simultaneous trends are transforming the global economy: the emergence of AI infrastructure and the challenges faced by EV manufacturers. The sheer scale of the AI demand in the case of CoreWeave and Nvidia suggests that the demand stays strong despite the cost problems faced by companies. The loss of the market by BYD demonstrates the dangers of competition and price battles among EVs.

Meanwhile, technology is the driving force of value creation in the world, as such trillion-dollar giants as Nvidia, Microsoft, Apple, and Google remain at the top of global markets.

Whether CoreWeave can strike a balance between growth and profitability in the next few years, and whether BYD can revive its product range to survive the EV downturn, remains to be seen. What is obvious is that AI is ascending to even higher levels, and EVs have an even more questionable journey ahead.