In a strategic move that could reshape the AI cloud computing landscape, OpenAI has inked a five-year, $11.9 billion agreement with CoreWeave, a cloud service provider known for its extensive GPU resources. According to Reuters, sources close to the deal revealed that OpenAI would receive $350 million in CoreWeave equity, a private placement independent of CoreWeave’s upcoming IPO.
CoreWeave’s Meteoric Rise and Strategic Win
CoreWeave, which recently filed to go public, has yet to set a date or pricing for its IPO. The deal with OpenAI is a significant boost, particularly as CoreWeave’s revenue skyrocketed from $228.9 million in 2023 to $1.9 billion in 2024—a nearly eightfold increase. Before this agreement, Microsoft was CoreWeave’s largest customer, contributing 62% of its revenue.
Backed by Nvidia, which holds a 6% stake, CoreWeave specializes in AI-specific cloud services. By the end of 2024, it operated 32 data centers and over 250,000 Nvidia GPUs, with recent expansions incorporating Nvidia’s latest AI-optimized Blackwell chips. The heavy reliance on Microsoft previously posed concerns for IPO investors, but this new OpenAI partnership significantly diversifies CoreWeave’s client base and strengthens its position ahead of its public debut.
The Complicated Relationship with Microsoft
This deal further strains the already complex relationship between OpenAI and its primary investor, Microsoft. While Microsoft has poured billions into OpenAI and is entitled to a share of its revenue, tensions have been brewing as both companies increasingly compete for AI dominance.
OpenAI’s new partnership with CoreWeave effectively places it on the same cloud infrastructure that Microsoft has relied on, while also securing an ownership stake in the company. This strategic move gives OpenAI greater control over its AI compute resources at a time when CEO Sam Altman has publicly stated that the company is “out of GPUs.”
Adding to the rivalry, Microsoft is developing its own AI models, known as MAI, as direct competitors to OpenAI’s offerings. It has also brought on Mustafa Suleyman, co-founder of DeepMind and former head of Inflection AI, to lead its AI division—positioning itself as a formidable contender in the race for AI supremacy.
CoreWeave’s Origins and Future Prospects
CoreWeave’s journey is an intriguing one. Originally launched as a crypto mining operation by former hedge fund professionals, the company has transformed into a key player in AI cloud computing. Its founders have already cashed out a combined $488 million in shares, each walking away with over $150 million.
Despite its rapid growth, CoreWeave carries a hefty $7.9 billion in debt. If its IPO meets expectations, the company plans to use some of the proceeds to reduce this financial burden. While the company initially leveraged GPUs to mine cryptocurrency, it is now capitalizing on the AI boom to generate even greater revenue.
What’s Next?
The OpenAI-CoreWeave deal signifies a major shift in the AI cloud computing space, shaking up existing partnerships and fueling the ongoing competition between tech giants. As CoreWeave prepares for its IPO and OpenAI seeks more computing power, the evolving dynamics between Microsoft, OpenAI, and emerging players like CoreWeave will continue to shape the future of AI infrastructure.
Both CoreWeave and OpenAI have declined to comment on the deal, but the implications are clear: the battle for AI supremacy is intensifying, and OpenAI is making bold moves to secure its place at the forefront.
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