To The Moon

NVIDIA is intervening in the AI infrastructure financing crisis in a manner increasingly resembling a central bank.

After verbal endorsements for its key holding CoreWeave failed to stabilize the market, the chip giant is reportedly planning to inject hundreds of millions of dollars into another struggling Australian AI cloud service provider, Firmus Grid.

According to The Information on Tuesday, NVIDIA (ASX: NVDA) is in negotiations with Firmus for an investment in the hundreds of millions. Firmus, which faced setbacks earlier this month with a failed IPO plan at a $30 billion valuation, is seeking at least $2 billion in private financing. NVIDIA had previously participated in its last three funding rounds and is one of its major shareholders.

This potential additional investment is the latest move by NVIDIA to signal to the outside world that it is willing to support the entire ecosystem with real money rather than just words amid a massive sell-off in AI stocks. Currently, the financing environment for AI data center operators is deteriorating rapidly, with public market investor confidence continuously eroding. Whether NVIDIA's strategic injections can truly reverse the downturn remains a core question for the market.

Firmus IPO Fails, NVIDIA Steps In

Firmus's failed listing has become one of the triggers for this round of AI stock sell-offs.

The seven-year-old Australian company had planned to list on the Australian Securities Exchange at a $30 billion valuation, aiming to raise $5 billion, but ultimately withdrew its application citing "market volatility." Reports indicate that investors widely viewed its valuation as too high and speculative, severely mismatched with Firmus's current revenue scale and planned data center capacity.

Firmus's major investors include Blackstone, Coatue Management, and Jane Street. In terms of financing structure, the company has raised over $13 billion to date, with approximately $10 billion in debt financing. NVIDIA had previously been deeply tied to Firmus under its credit support program framework—in June this year, NVIDIA agreed to provide credit backing for Firmus's procurement of at least 170,000 Rubin and Blackwell GPU server racks to facilitate easier debt financing. The related server racks are valued at about $15 billion and will be deployed in facilities built by Singapore data center developer DayOne on Batam Island, Indonesia.

After the IPO failure, Firmus is seeking at least $2 billion in private financing. According to The Information, citing informed sources, NVIDIA had originally prepared to invest heavily in the IPO, and the scale of its investment in this private financing may still change, with the possibility that the financing could fall through.

NVIDIA's Logic: Every Dollar Invested Is a Dollar for Itself

NVIDIA's continued infusion into neoclouds has a clear business rationale.

Hyperscale cloud providers like Google, Microsoft, and Amazon are accelerating self-developed chips to reduce dependence on NVIDIA, while neoclouds are precisely a key pillar of demand for NVIDIA GPUs. The logic behind NVIDIA's additional investment in Firmus is straightforward: every extra dollar Jensen Huang invests helps customers buy one more chip.

According to The Information's analysis, NVIDIA has provided over $170 billion in credit guarantees and capital support to neoclouds and other major customers. As of July this year, NVIDIA's non-public securities holdings—primarily private company equity—reached $51.2 billion, more than doubling from six months earlier.

To sustain this ecosystem, NVIDIA is also adjusting its support methods. According to informed executives, when NVIDIA initially provided credit support to neoclouds, it demanded a share of their future cloud revenue, a term that some larger neoclouds did not accept. NVIDIA has now shifted to offering shorter-term credit support agreements in exchange for a smaller revenue share. Additionally, NVIDIA has internally formed a dedicated team, co-led by Jensen Huang's son-in-law Nico Caprez, to assist neoclouds in finding data center locations with available power.

CoreWeave's Warning: Words Can't Beat the Market

Firmus's plight is not isolated. The entire neocloud industry is facing dual pressures of soaring financing costs and collapsing investor confidence, and NVIDIA's verbal endorsements have proven ineffective.

Last week, Jensen Huang publicly defended CoreWeave at an event in Stockholm, stating that its "cost of capital is actually declining." However, the market did not buy it—CoreWeave's stock plunged 11.9% the next day. CoreWeave's borrowing cost trends are in stark contrast to Huang's remarks: the spread on its project financing secured by chips and customer contracts widened from 225 basis points above the benchmark rate in March this year to 550 basis points in August; for unsecured bonds, the yield on its 2032-maturity bonds is currently around 14%, compared to about 8.5% just four months ago.

The experience of Australian data center operator Nextdc provides another warning: the company's stock plummeted 41% in a single day on Wednesday this week after public opposition led to project delays and a downgrade in earnings expectations. Just last month, Nextdc issued A$1.1 billion in convertible bonds at a low coupon of 1.75%, but its stock has now fallen to about one-third of the conversion price, leaving the securities deeply out of the money.

Facing persistent market skepticism, Huang previously told investors that "this too shall pass" and advised them to "buy the dip." Now, NVIDIA is being asked to deliver on that promise with actions. For a company dubbed the "AI central bank" by the market, injecting funds into Firmus may just be the latest step in its role as "lender of last resort," but whether it can truly stabilize market confidence remains to be seen.