By Britney Nguyen
The deal offers some reassurance to CoreWeave investors in light of the company’s heavy customer concentration and rampant competition for cloud offerings
CoreWeave’s stock was up more than 6% during midday trading on Monday.
CoreWeave Inc. and Nvidia Corp. are deepening their ties with a new cloud-services agreement valued at $6.3 billion – and the deal is giving CoreWeave investors some reassurance.
The cloud-infrastructure provider (CRWV) said it entered a new order form with the artificial-intelligence chip maker earlier this month that will give Nvidia (NVDA) access to computing capacity that it can’t sell. Under the existing agreement, which was made in April 2023, when CoreWeave’s data-center capacity “is not fully utilized by its own customers, Nvidia is obligated to purchase the residual unsold capacity” until April 2032, CoreWeave said in a Securities and Exchange Commission report on Monday.
The guarantee from Nvidia could help alleviate some investors’ concerns over the viability of CoreWeave’s business, which so far depends mainly on two customers and is subject to fierce competition, even with the insatiable appetite for AI compute.
CoreWeave shares were up more than 6% during midday trading on Monday.
The company serves developers and major tech companies, including Microsoft Corp. (MSFT) and OpenAI, by providing large-scale access to AI hardware like Nvidia’s graphics processing units (or GPUs) for intensive AI workloads such as training and inferencing. CoreWeave is one of a few emerging neoclouds, or AI hardware and service providers, that serve as an alternative to hyperscalers such as Amazon.com Inc.’s (AMZN) Amazon Web Services and Alphabet Inc.’s (GOOG) (GOOGL) Google Cloud. Microsoft’s Azure is also considered a hyperscaler rival.
In a statement shared with MarketWatch, CoreWeave said the expanded contract with Nvidia “reflects the scale, trust and pivotal role CoreWeave plays in accelerating AI innovation worldwide.”
An Nvidia spokesperson noted the “long lead times and 4-6 year customer commitments” that come with building the necessary data center capacity to meet ongoing industrywide demand.
“To support startups and small to mid-sized companies, Nvidia and CoreWeave are proactively building data center infrastructure and provisioning data center capacity to meet evolving capital needs,” the spokesperson said.
Before its initial public offering in March, CoreWeave announced that it would be delivering AI infrastructure to OpenAI through a contract worth up to $11.9 billion. It followed up with another deal in May with the ChatGPT maker that is worth up to $4 billion and will run through April 2029. In a Form-10Q for the period ended in June, CoreWeave disclosed that Microsoft, which is a top-backer for OpenAI, is one of its two largest customers. It also said that it expects “OpenAI to be a significant customer in future periods.”
“Ultimately, CoreWeave’s focus on large customers is its greatest risk,” Seaport Research analyst Jay Goldberg wrote as he initiated coverage of CoreWeave’s stock with a neutral rating on Monday.
CoreWeave’s stock has nearly tripled since its IPO in March.
See more: CoreWeave’s stock has surged 38% in 4 days. Why investors might be getting ahead of themselves.
However, MoffettNathanson analyst Nick Del Deo said last week that investors should be cautious about CoreWeave’s AI opportunity despite signals that AI demand still remains strong. While that provides for a “favorable” view for the company, “it’s inappropriate to think of CoreWeave’s infrastructure capabilities as singularly unique,” Del Deo said, adding that “they can be matched.”
For example, Netherlands-based Nebius Group N.V., which is also considered an up-and-coming neocloud, announced last week that it had made a multiyear deal worth $17.4 billion with Microsoft to provide it with AI infrastructure capacity for a new data center in New Jersey.
Although the move points to increasing AI demand driving major tech companies to look elsewhere from hyperscalers for compute capacity, in Del Deo’s view, it suggests “that the returns on delivering AI infrastructure to large customers are likely to compress due to competitive forces.”
-Britney Nguyen
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09-15-25 1405ET
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