In a grandmaster level chess move, Openai has signed a five-year $11.9 billion agreement with GPU heavy cloud service provider CoreWeave, according to Reuters, citing people close to the deal.
The deal includes Openai receiving $350 million worth of shares on CoreWeave, sources told Reuters. Private placements are said to be separate from CoreWeave’s planned IPO.
CoreWeave applied for it to be a public company last week, but it has not yet been priced or is not planning to debut.
It’s a victory for both companies. One of these deals is to be eye-opening (besides the billions involved). Before this transaction, CoreWeave’s biggest customer was Microsoft. In fact, in 2024, Microsoft accounted for 62% of CoreWeave’s revenue, up to an astonishing $1.9 billion.
CoreWeave is backed by Nvidia, which holds a 6% stake, and runs an AI-specific cloud service with a network of 32 data centers operating over 250,000 NVIDIA GPUs at the end of 2024. Since then, CoreWeave has added GPUs including Blackwell, Nvidia’s latest product that supports AI inference, the company said.
Such a dependency on one customer is usually a concern for IPO investors, and could have added “hair” to CoreWeave’s wish to raise more than $4 billion in IPOs. Landing Openai directly as a customer in a multi-billion dollar deal should help derive corewave investors.
Microsoft and Openai
What makes this move equally interesting is that it is another step in the worsening insanity relationship between Microsoft and Open I.
It’s as if Openai CEO Sam Altman saw Microsoft’s use of CoreWeave and said, “Take my beer.”
Openai not only has access to the same cloud, but also has ownership of the company.
Of course, Microsoft is a major supporter of Openai in agreements that grant Microsoft the right to collect a portion of Openai’s revenue. However, as Openai’s fortunes skyrocketed, tensions between the two companies have been rising over the years. Openai is reportedly competing with Microsoft for its enterprise customers and is even working on deploying expensive AI agents.
In January, Microsoft stopped being Openai’s only cloud provider with contracts with Stargate AI Infrastructure’s large SoftBank, Oracle and more. Openai requires more computational resources. Last week, Altman complained that Openai is “outside the GPU.”
Microsoft is working on a unique AI “inference” model that rivals Openai’s O1 and O3-Mini. We develop our own model family called Openai and competitive MAI. He also hired Altman’s rival Mustafa Suleyman to lead Microsoft AI.
But CoreWeave is an amazing piece of chess.
CoreWeave said it has begun life as a crypto mining work, founded by a former hedge fund man. The three co-founders have already been cashed out of $488 million worth of stock. CoreWeave has an astounding $7.9 billion in debt in its books.
If the IPO generates billions of new capital, they say they want what they want, and the company will use at least a portion of it to pay off the debt.
These founders once tried to literally use GPUs to make money, but figuratively they’re achieving that.
CoreWeave and Openai did not respond to requests for comment.
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