Nv's new chips need new datacenters, but you can't have bit barns without power:
Nvidia has made its fortune on the AI boom, but the company has a problem. It faces a growing number of roadblocks which, if left unchecked, could pop the bubble.
Thus, the AI arms dealer has been forced to play a game of Whac-a-Mole, shoring up the foundations of its empire by investing its spoils into ensuring its customers don't stop buying.
The latest example of this came Friday, when Nvidia announced it'd become a minority investor in Cloverleaf.
Founded in 2024, Cloverleaf specializes in laying the literal foundations – by which we mean the land and power – necessary to build bit barns so they can be leased by the cloud providers and model devs that actually pay the bills for Nvidia's hardware.
Nvidia can only sell as many GPUs as there are datacenters to put them, and those datacenters can only be deployed where there's adequate power to support them. And since its latest round of GPUs can't just be dropped into any old bit barn, Nvidia is going to need a lot more datacenter capacity, and by extension a lot more power.
[...] So, to sell its next-generation GPUs, Nvidia not only needs its customers to have adequate capacity, but also needs those facilities to offer the right mix of power and cooling.
It's well established that Nvidia prioritizes customers with datacenters ready to fill. However, many of the GPU-slinger's biggest customers don't actually own datacenters, but instead lease capacity from others. For example, Crusoe built OpenAI's Stargate facility in Abilene, Texas, and Oracle runs it. Altman and crew are simply supplying the demand.
So, Nvidia has invested in model devs and neocloud partners by helping them get financing or even investing directly in their businesses. Nvidia's investments in OpenAI, CoreWeave, and Nebius are just a few examples.
That works so long as the bit barns available for rent are the right size and shape for the hardware. But, as we noted earlier, many existing facilities aren't.
[...] The proliferation of AI datacenters has begun to strain grid capacity, forcing many new ones to employ behind-the-meter power generation. For example, Nebius has begun using Bloom Energy's natural gas fuel cells to power its datacenters, rather than relying entirely on existing grid infrastructure.
Nvidia's investment in Cloverleaf is the latest example of how the GPU slinger is using the circular AI economy to its advantage. The terms of the deal haven't been disclosed, but the benefits are obvious: Cloverleaf gets an influx of cash, while Nvidia gets greater control over the build process.
[...] The deal is the latest example of how Nvidia is using its war chest to shore up cracks in the broader AI ecosystem before they become a problem. We wrote a few weeks ago about how the company was helping AI infrastructure startups secure financing in exchange for a share of the revenues, but it's now clear Nvidia is attacking potential roadblocks from every angle.
(Score: 2) by JoeMerchant on Monday August 24, @04:17PM (1 child)
If you're going to build a gold mine, you're going to need miners, you're going to need heavy transport (rails) to bring the equipment, you're going to have to build the towns, the sewage systems, all of it, otherwise the gold won't get mined by you, it'll get mined by the next company that lays in better infrastructure.
As CEO of a mega-corp, I would ask: "Where can we grow next? What's holding us back from that? What can we do to help remove those barriers to our growth?"
Investment in other companies to help them help us grow is just good business...
The "open market" is wise, it wouldn't have put such capital in the hands of NVidia if NVidia were not meant to determine what the world needs to do next. /s
🌻🌻🌻🌻✌️ [google.com]
(Score: 2) by driverless on Tuesday August 25, @11:13AM
you're going to need a shotgun loaded with gold grains to convince people to buy it from you.