OpenAI has secured a nearly $12 billion deal with cloud computing provider CoreWeave, strengthening the company ahead of its anticipated $35 billion initial public offering (IPO). As part of the agreement, OpenAI will also acquire a $350 million equity stake in CoreWeave at the time of its IPO, according to sources familiar with the matter.
The five-year contract will see CoreWeave provide essential computing power to OpenAI for training and running its advanced artificial intelligence models. This move comes as OpenAI seeks to diversify its computing resources beyond Microsoft, its largest partner to date. Last year, Microsoft accounted for 62% of CoreWeave’s revenue and has committed to spending $10 billion on CoreWeave’s services by 2030. However, OpenAI’s new deal could see it outspending the tech giant.
The Financial Times recently reported that Microsoft had stepped away from a previous agreement with CoreWeave due to concerns over the cloud provider’s delivery capabilities. This setback came just as CoreWeave filed for its New York IPO, aiming to raise approximately $4 billion. The fresh contract with OpenAI is expected to bolster CoreWeave’s position and help fill the void left by Microsoft’s decision.
CoreWeave, originally founded in 2017 as a cryptocurrency mining operation, has since pivoted to providing cloud services tailored for AI model development. The company has become a major player in the sector, securing access to over 250,000 of Nvidia’s high-performance AI graphics processing units (GPUs), making it one of Nvidia’s largest customers.
OpenAI’s latest partnership underscores its commitment to expanding and securing computing infrastructure, a crucial factor in the competitive AI race. Sam Altman, OpenAI’s CEO, has emphasized the importance of robust infrastructure to support the next generation of AI advancements. Meanwhile, Microsoft CEO Satya Nadella has recently warned about the risk of an “overbuild” in computing capacity as tech giants continue to invest heavily in data centers.
Beyond CoreWeave, OpenAI has been actively exploring additional infrastructure partnerships. The company has collaborated with SoftBank on a potential $500 billion data center initiative dubbed ‘Stargate’ and has also entered agreements with Oracle for data center services.
