CoreWeave Secures $6.3B Nvidia Cloud Deal

CoreWeave gets a $6.3B Nvidia deal, ensuring unused cloud is put to use, and its core role in AI-driven data center services is strengthened.

CoreWeave has locked in a $6.3 billion deal with Nvidia so that the AI chipmaker will buy up whatever it can't sell in the cloud through April 2032. The deal boosts CoreWeave as a leading Nvidia cloud partner and shields it from changes in AI demand.

Shares of CoreWeave increased 8% from the announcement. The company runs AI-focused data centers in the U.S. and Europe that provide access to the GPUs of Nvidia, which are crucial for training and running large AI models.

This agreement builds on a 2023 partnership and is a financial safeguard to ensure that CoreWeave's cloud resources are utilized to the fullest, irrespective of any end-customer demand. Analysts perceive this as a strategic diversification for Nvidia, stepping away from its primary customer base.

Earlier this year, CoreWeave announced a five-year contract with OpenAI worth $11.9 billion that will provide cloud computing capacity, along with another contract that is valued at up to $4 billion through 2029.

While demand for CoreWeave's services rose sharply in Q2 with the adoption of AI, expenses also increased by nearly four times to $1.19 billion to highlight the financial pressures of sudden growth.