OpenAI and CoreWeave Sign Major Deal

OpenAI has signed a five-year contract worth $11.9 billion with CoreWeave to provide AI infrastructure for training its models.

The agreement includes $350 million in CoreWeave stock linked to its upcoming IPO, although CoreWeave will not receive proceeds from the share issuance to OpenAI, as reported by Reuters.

Leadership Insight

OpenAI CEO Sam Altman emphasizes the need for “reliable compute” to train models at scale, indicating that this deal complements existing collaborations with Microsoft and Oracle. It will also enhance OpenAI’s initiatives with Softbank for Project Stargate.

Strategic Importance

This agreement is strategic for both companies in a competitive AI infrastructure market:
– For OpenAI, it diversifies its computing resources beyond Microsoft.
– For CoreWeave, it provides a significant boost before its $35 billion public offering expected in 2025, aiming to raise $4 billion.

Financial Overview

CoreWeave, which has $1.4 billion in cash reserves, is seeking to scale despite reporting an $863.4 million net loss on $1.92 billion in revenue for fiscal 2024, a 737% increase from 2023.

Additionally, the deal comes shortly after CoreWeave announced plans to acquire AI developer platform Weights & Biases for $1.7 billion, further solidifying its position in the AI infrastructure sector.

Founded in 2017 as a crypto mining operation focused on Ethereum, CoreWeave pivoted in 2019 to specialize in AI infrastructure and has become one of Nvidia’s largest customers, assembling over 250,000 AI GPUs.

Upcoming IPO

The upcoming IPO will be led by Morgan Stanley, JPMorgan Chase, and Goldman Sachs, with CoreWeave’s shares set to trade under the symbol CRWV on Nasdaq.

Edited by Sebastian Sinclair