Why? Their deal involves 2 billion in equity from Nikola for non-cash manufacturing work and development from GM.

GM was snookered. I doubt that Nikola has IP worth that much work

Not really. From a financial pov GM wins hard no matter what happens. Nikola somehow becomes a real company:

GM gets 2 billion in stock + 700 million in cash reimbursements and a strategic partnership. Nikola implodes, then GM still gets whatever of the 700M they could file and all the work they did is directly useful and necessary for their own EV projects. They're basically getting paid to do their own R&D

The hit is to their reputation.

Nikola basically paid GM to "partner" with them in a lopsided deal so they could have more credibility.

Yes, I can see that is a valid POV, Nicola does indeed need validation like this.