Cathie Wood's Ark Details Nvidia's Unique Strategy To Take On Amazon, Microsoft And Google In AI Arms Race

Chipmaker Nvidia Corp. NVDA has opted for an indirect approach to take on cloud titans Microsoft Corp. MSFT, Alpahabet, Inc. GOOGL GOOG and Amazon, Inc. AMZN, all of which are developing in-house accelerators to compete with the chipmaker.

Nvidia supplies AI accelerators to CoreWeave, a crypto mining company that has transitioned to a GPU-focused cloud service provider, said Frank Downing, research director of Cathie Wood-led Ark Investment Management‘s Next Generation Internet.

The analyst noted that CoreWeave recently secured $2.3 billion in debt financing, led by Magnetar Capital, Blackstone and others, to expand its infrastructure, primarily AI accelerators from Nvidia. The AI accelerators will serve as collateral for debt, he noted.

Nvidia is also an early strategic investor in CoreWeave.

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The cloud startup’s latest capital raise, which is more than five times higher than the previous $421 million Series B round funding “highlights the race to secure as much AI-compute as possible in anticipation of an explosion in demand for AI-powered products and services,” Downing said.

The analyst also pointed to a report that said Nvidia was diverting its latest chip to CoreWeave, which is benefiting from access to the former's advanced technology.

CoreWeave pivoted to building a cloud infrastructure that offers GPU acceleration at scale in 2019, just in time to take advantage of the skyrocketing demand for GPUs in the AI industry.

Nvidia closed Monday’s session at $454.17, up 1.65%, according to Benzinga Pro data.

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