(Reuters) – CoreWeave has signed a $6.3 billion initial order with backer Nvidia, the data center operator said on Monday, in a deal that guarantees that the AI chipmaker will purchase any cloud capacity not sold to customers.<\/p>\n
Shares of CoreWeave rose 8% as the deal cements the company’s position as a key Nvidia cloud partner and cushions it against any potential decline in demand for AI computing capacity.<\/p>\n
CoreWeave operates AI data centers in the U.S. and Europe, offering access to Nvidia’s GPUs, which are highly sought after for training and running large AI models.<\/p>\n
The latest order, which requires Nvidia to purchase any unsold capacity through April 13, 2032, builds on an April 2023 agreement.<\/p>\n
The amended agreement serves as a backstop for CoreWeave, ensuring that capacity will be leveraged irrespective of the end customer, analysts at Barclays said, adding that the incremental spending by Nvidia is seen as a healthy diversification away from the company’s largest customers.<\/p>\n
“We see this as a positive for CoreWeave given concerns from investors around the company’s ability to fill data center capacity beyond its two largest customers (Microsoft and OpenAI).”<\/p>\n
In March, CoreWeave and OpenAI agreed on a five-year contract worth $11.9 billion, under which the New Jersey-based firm provides the ChatGPT maker cloud computing capacity.<\/p>\n
The company signed an additional agreement under which OpenAI has committed to pay up to $4 billion through April 2029.<\/p>\n
CoreWeave in August reported a surge in demand for its cloud services in the second quarter, amid the rapid adoption of artificial intelligence tools.<\/p>\n
However, operating expenses jumped nearly fourfold to $1.19 billion, highlighting the strain that rapid revenue growth is placing on its finances.<\/p>\n
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Sriraj Kalluvila)<\/p>\n","protected":false},"excerpt":{"rendered":"(Reuters) – CoreWeave has signed a $6.3 billion initial order with backer Nvidia, the data center operator said…\n","protected":false},"author":2,"featured_media":147485,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[49,48,78657,4348,285,14372,6494,61],"class_list":["post-147484","post","type-post","status-publish","format-standard","has-post-thumbnail","category-computing","tag-ca","tag-canada","tag-capacity","tag-cloud-computing","tag-computing","tag-data-center","tag-nvidia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/147484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=147484"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/147484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/147485"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=147484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=147484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=147484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}