That’s why many people think AI is a bubble. This includes OpenAI CEO Sam Altman, who keeps saying that AI is a bubble, while raising and spending huge amounts of money seems like a bubble indicator to everyone else. It’s all quite confusing. so we sent the verge Senior reporter Liz Lopato comes to us to report on the AI bubble – is it real, how it might burst, and what it means.
she is joining decoder Today to talk about one particular company that sits right in the middle of it all. That company is called CoreWave, and Liz spent a lot of time delving into its history, its financials, and the really fascinating story it tells us about the modern AI boom. Liz has a big story about all this running next week The VergeSo if you want even more details after listening to this episode, stay tuned for that.
But to me the basics of the Corewave story itself are fascinating. CoreWeave was founded by former commodities traders as an Ethereum mining firm out of New Jersey. Like much of the tech industry, when crypto boomed, CoreWeave turned to AI. It began using the same GPUs it was hoarding to mine Ethereum to launch its own data center operation.
CoreWeave’s big innovation is creative financing. It raises huge sums of money to build data centers filled with Nvidia GPUs, and then leases it out to big AI companies to meet the industry’s seemingly insatiable demand for computation. This has turned CoreWeave into a pillar of the hugely expensive AI infrastructure build-out that has sent markets reeling over the past year.
CoreWeave itself went public last March, and today it is worth about $50 billion. This year alone, CoreWeave has signed several billion-dollar contracts with companies like Meta and OpenAI for access to their data centers.
But what Liz has found is that Corewave’s story is much more complicated than a few Wall Street types who made a few smart bets and became filthy rich. In fact, the entire narrative around CoreWeave – that it’s the company that makes the picks and shovels of the AI gold rush – is built around some very complex financial maneuvering, as well as a unique relationship with Nvidia.
In many ways, Liz says, CoreWave could not exist without Nvidia’s extraordinary level of financial investment — and given the value the AI industry is placing on Nvidia’s stock, its chips, and the wholesale transformation of the economy AI should deliver at some point in the future.
So I wanted to ask Liz what it means that CoreWeave is so dependent on Nvidia, because the AI industry is becoming so dependent on CoreWeave, and what might happen in a world where the AI bubble really bursts.
If you want to read more about what we discussed in this episode, check out these links:
Questions or comments about this episode? Contact us at decoder@theverge.com. We literally read every email!