OpenAI, the company behind ChatGPT, just signed a $11.9 billion, five-year deal with CoreWeave, a rising star in AI data center tech. This isn’t just a handshake and a check; it’s a game-changer that’s got everyone from Wall Street to Silicon Valley buzzing. Let’s break it down, step by step, and figure out why this matters, not just for these two companies, but for the future of AI itself.
OpenAI, as a heavyweight in AI research, needs a lot of computing power to keep churning out smarter, faster models . Under this deal, CoreWeave, the New Jersey-based company will supply OpenAI with the tech muscle it needs for the next five years. And there’s a cherry on top: OpenAI gets a $350 million stake in CoreWeave, tied to the latter’s upcoming debut on the Nasdaq stock exchange.
CoreWeave’s initial public offering (IPO) is just weeks away, and analysts are whispering that this contract could push its valuation past $35 billion. That’s a big leap from the $19 billion it was pegged at last May. So, let’s dig into the details and see what’s driving this blockbuster partnership.
If you haven’t heard of CoreWeave yet, don’t worry, you’re not alone. This company started back in 2017 as Atlantic Crypto, mining cryptocurrency with GPUs. But in 2019, it pivoted hard, betting on the AI boom instead. Today, CoreWeave runs 32 data centers stuffed with over 250,000 Nvidia GPUs, think of them as supercomputers on steroids. In 2024 alone, its revenue shot up to $1.92 billion, a whopping 700% jump from the $228.9 million it made in 2023. That’s the kind of growth that makes investors drool.
CoreWeave isn’t just a one-trick pony, either. It’s already a go-to for big names like Microsoft (which accounts for 62% of its revenue), Meta, IBM, and Cohere. Now, with OpenAI on board, it’s cementing its spot as a powerhouse in the AI infrastructure game. Michael Intrator, CoreWeave’s CEO, couldn’t hide his excitement, saying, “Partnering with OpenAI on this net new contract underscores CoreWeave’s proven ability to deliver reliable and performant infrastructure services, powering AI innovations for world-leading AI labs.”
OpenAI already works with giants like Microsoft, Oracle, and SoftBank, but it’s hungry for more. This deal with CoreWeave is like adding a turbocharger to its engine.
Sam Altman, OpenAI’s CEO, put it this way: “CoreWeave is an important addition to OpenAI’s infrastructure portfolio, complementing our commercial deals with Microsoft and Oracle, and our joint venture with SoftBank on Stargate.”
Translation? They’re not putting all their eggs in one basket. Altman added, “We’re excited to continue scaling with CoreWeave so we can train even more powerful models and offer great services to even more users.” In other words, get ready for some next-level AI coming your way.
CoreWeave is pulling in nearly $2 billion a year now, but it’s not all profit, last year, it posted a net loss of $863 million. That’s not unusual for a fast-growing tech company; they’re spending big to build more data centers and acquire more clients. Over the past two years, they’ve raised over $12 billion from investors, including a $1.1 billion round last May and a $650 million credit line in October 2024. This OpenAI deal is another $11.9 billion in the bank over five years, proof they’re playing the long game.
For OpenAI, shelling out $11.9 billion might sound steep, but it’s an investment in staying ahead. AI isn’t cheap, research from Stanford’s Human-Centered AI Institute shows that training a single large language model can cost tens of millions, and that’s before you factor in the ongoing costs of running it. With hundreds of millions of users worldwide, OpenAI needs a rock-solid setup to keep the lights on.
Demand for GPU power is skyrocketing as everyone from startups to tech titans races to build smarter systems. A 2024 report from Gartner predicts that global spending on AI infrastructure will hit $200 billion by 2025, up from $122 billion in 2023. CoreWeave’s betting big on that trend, and OpenAI’s all-in too.
But here’s a twist: Microsoft’s in the mix. It’s OpenAI’s biggest backer and CoreWeave’s top customer, so this deal’s got some folks wondering about the dynamics. Some reports hint that Microsoft canceled contracts with CoreWeave over missed deadlines, though CoreWeave says that’s bunk. Either way, OpenAI teaming up with CoreWeave could shake things up, giving it more leverage and options beyond Microsoft’s orbit.
