Quick overview

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NVIDIA (NVDA) has dominated the AI chip market, but Michael Intrator, CEO of CoreWeave (CRWV), just explained why that extraordinary dominance necessitates constant defense. According to Intrator, Nvidia is “covering their bases” by ensuring that its clients have access to sufficient compute through its forward-thinking AI infrastructure partnerships.

However, Nvidia needs to be at the top of its game; it is currently valued at more than $5.30 trillion, and any failure would allow Advanced Micro Devices (AMD) to increase its market share.

NVIDIA’s market capitalization was approximately $750 billion in May 2023, almost three years ago.  The demand has increased more than sevenfold since then due to the constant demand for AI chips.

Intrator’s remarks add yet another level to the company’s larger strategy, following Nvidia’s most recent agreement with IREN.

REN and the AI chip giant will collaborate to install about 5 gigawatts of DSX-branded AI infrastructure throughout its data center platform. NVIDIA also obtained the right to purchase up to 30 million IREN shares at $70 apiece over five years, totaling a $2.1 billion.

NVIDIA is pursuing a dual-pronged strategy, selling chips and guaranteeing the i, and this deal adds to a long list of such initiatives.

NVIDIA’s stock increased by 16.33 percent over the last month, while CoreWeave’s increased by 12.45 percent. Compared to CoreWeave’s 123.28 percent gain over the previous year, it gained 88.16 percent.

The obvious angle is the one that investors have been following for years: whether demand for Nvidia’s AI chips remains strong. It obviously does.

However, Intrator believes that the more important question is whether Nvidia could expand the AI ecosystem to maintain most of the AI demand on its own platform.