CoreWeave CEO Defends AI Circular Deals - Industry Insights

CoreWeave Navigates a Year of Growth and Scrutiny

The past year has presented both opportunities and challenges for CoreWeave, a prominent provider of AI cloud infrastructure. Despite initial expectations, their initial public offering (IPO) in March did not fully meet anticipated levels of success.

Setbacks and Acquisitions

Further complicating matters, a planned acquisition of Core Scientific, a business partner, was ultimately unsuccessful in October. This outcome stemmed from doubts expressed by the shareholders of the target company.

Despite these hurdles, CoreWeave has actively pursued a strategy of acquiring various companies. Simultaneously, the company’s stock has experienced fluctuations, drawing both praise and criticism for its position within the rapidly expanding AI data center market.

Defending the Business Model

At the Fortune Brainstorm AI summit in San Francisco, CoreWeave’s co-founder and CEO, Michael Intrator, addressed criticisms leveled against his company. He emphasized that CoreWeave is pioneering a “new business model” for cloud computing construction and operation.

Nvidia GPUs are a crucial asset for CoreWeave, and the company leverages their value through borrowing to finance its operations. Intrator suggested that innovation inevitably involves encountering obstacles.

Addressing Stock Volatility

When questioned about the company’s sometimes erratic stock performance, Intrator acknowledged the “seesawing” nature of the price. He pointed out that the IPO coincided with the implementation of President Trump’s tariffs, creating a period of economic uncertainty.

“We launched a successful IPO despite significant headwinds,” Intrator stated to Andrew Nusca, editorial director of Brainstorm. He expressed pride in the company’s accomplishments to date.

Stock Performance and Debt Concerns

CoreWeave’s stock debuted at $40 in March and subsequently rose to over $150 before settling around $90. Some observers have likened its price swings to those of a meme stock.

The company’s substantial debt level has also contributed to concerns. A recent announcement of additional debt financing for data center expansion led to an 8% drop in the stock price.

Disruption and Adaptation

Intrator views CoreWeave as a disruptive force, suggesting that its unconventional methods may require time for acceptance. “Introducing a new way of doing business in a static environment will naturally take time for some to adjust,” he explained.

From Crypto Mining to AI Infrastructure

Originally established as a cryptocurrency mining operation, CoreWeave quickly evolved into a key provider of AI infrastructure. The company now supplies GPUs to AI developers and maintains partnerships with industry leaders like Microsoft, OpenAI, Nvidia, and Meta.

Addressing Circularity Concerns

The topic of “circularity” – investment patterns among powerful AI companies – was also discussed. Such arrangements have faced criticism regarding the industry’s long-term economic stability.

Given Nvidia’s role as both an investor and GPU supplier, Intrator dismissed these concerns, stating that companies are responding to a significant imbalance between supply and demand by collaborating.

Expansion and Future Plans

Since its IPO, CoreWeave has continued to expand its business through strategic acquisitions. These include Weights & Biases, an AI developer platform, and OpenPipe, a startup focused on AI agent deployment.

In October, the company also reached agreements to acquire Marimo, an open-source notebook creator, and Monolith, another AI company. Furthermore, CoreWeave has broadened its cloud partnership with OpenAI and intends to enter the federal market, offering cloud infrastructure to U.S. government agencies and the defense sector.