- CoreWeave has secured total backing of more than $12 billion
- It wants to double its data center footprint by the end of this year
- CoreWeave is poised to benefit from a unique relationship it has with GPU all-star Nvidia
The GPU market is on fire and niche cloud provider CoreWeave has more money than ever to burn. Analysts told Fierce CoreWeave is poised to benefit from a unique situation in the cloud market.
Earlier this month the company delivered a one-two punch, announcing $1.1 billion in fresh funding from a Series C round and $7.5 billion in debt financing two weeks later. Inclusive of earlier funding rounds and debt financing, the company has secured a total of over $12 billion in backing.
The company has said it plans to use its fresh funding to fuel further geographic and business expansion.
CoreWeave has seen explosive growth over the past year, growing its data center footprint from three to 14 facilities and quadrupled its employee roster. It is now working to double its data center footprint to 28 facilities by the end of this year. The new data centers will include two in the U.K.
“Our ambitions are to help reshape the cloud landscape, accelerate the AI race, and power the next generation of AI innovation that is changing the course of history,” CEO Michael Intrator said in a statement.
What's so special about CoreWeave?
Gartner recently predicted that the Infrastructure-as-a-Service cloud market segment will grow nearly 26% year on year to $180 billion in 2024 and a further 29% to $232.4 billion in 2025 thanks in large part to demand for artificial intelligence (AI) capabilities. The overall cloud market is also set to grow at a double digit pace from an estimated $675.4 billion in 2024 to $824.8 billion in 2025.
Sid Nag, Gartner VP analyst, told Fierce that while hyperscalers will be among the primary beneficiaries of this growth, the rising tide will also lift the boats of niche GPU cloud providers like CoreWeave and Vultr.
AvidThink's Roy Chua added CoreWeave especially is poised to benefit from a unique relationship it has with GPU all-star Nvidia.
"Nvidia (an investor in CoreWeave) has been willing to allocate a decent number of each generation of their latest GPUs to CoreWeave, despite supply limitations," Chua told Fierce via email. "Nvidia is likely using CoreWeave as a hedge against the hyperscalers, who are all large Nvidia customers, but also potential competitors in that all three have some version of their own AI silicon. That puts CoreWeave in a unique position of being able to acquire highly sought after GPU computing power."
From an investor perspective, Chua said this partnership, plus CoreWeave's demonstrated ability to pivot its business (as it did away from crypto to capture the AI demand), its scalability and efficiencies it reportedly gleans from orchestration software make the company a good bet.
"Their ongoing rapid growth, rich valuation, reports of getting ready to file for IPO in early 2025, signals the seemingly insatiable demand for GPU resources," Chua said.
Bulletproof?
But what about in the unlikely event that AI demand fails to materialize as expected? What happens to CoreWeave and its GPU stockpile then?
"Then CoreWeave will be left with a glut of GPU resources that are rapidly losing value," Chua stated.
"At that point, I don't think it's a matter of pivoting, but whether there's a next wave of workloads that require GPU computing and that has as much impact on our lives," he concluded. "That's not up to CoreWeave but some new breakthrough in science and technology: crypto was one, the surprising usefulness of the transformer architecture + large data corpus + fast-enough GPUs + a consumable interface (ChatGPT) was another. It's hard to imagine another one in the near future that has the same amount of impact."