CoreWeave's $6.3 Billion Backstop Deal With Nvidia: What It Means for Each Company

As the artificial intelligence (AI) data center race continues to escalate, a string of massive deals has been announced in recent weeks that involve big tech companies like Alphabet or Microsoft agreeing to provide a financial "backstop."A $6.3 billion agreement between red-hot CoreWeave (NASDAQ: CRWV) and the company at the very heart of the AI boom, Nvidia (NASDAQ: NVDA), sent both stocks higher. So what exactly is a backstop, and what does this latest announcement mean for both CoreWeave and Nvidia?A backstop agreement is a safety net -- a guarantee that a company will step in as a buyer of last resort if things don't go according to plan. Many of these deals have involved the guarantee of a lease. If, say, Microsoft agreed to provide a $1 billion backstop for a lease between a data center operator and a cloud provider, the data center operator will be made whole if the cloud provider fails to pay its lease (up to a maximum of $1 billion).Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool