So a lot of people think AI is a bubble. That includes OpenAI CEO Sam Altman, who keeps saying AI is a bubble all while raising and spending enormous amounts of money in ways that seem like bubble indicators to everyone else. This is all pretty confusing. So we sent Verge senior reporter Liz Lopatto out to report on the AI bubble — whether it’s real, how it might pop, and what all of this means.
She’s joining Decoder today to talk about a particular company that sits right in the middle of all of it. That company is called CoreWeave, and Liz has spent considerable time diving into its history, its financials, and the truly fascinating story that all of that tells us about the modern AI boom. Liz has a big story about all this running next week on The Verge, so if you want even more detail after you listen to this episode, stay tuned for that.
But to me the basics of the CoreWeave story are themselves fascinating. CoreWeave was founded by former commodities traders as an Ethereum mining firm out of New Jersey. Like so much of the tech industry, when crypto sputtered, CoreWeave pivoted to AI. It started to use the same GPUs it was stockpiling to mine Ethereum to start up its own data center operation.
CoreWeave’s big innovation is creative financing. It raises huge money to build data centers full of Nvidia GPUs, and then it leases that compute back to big AI companies to feed the industry’s seemingly insatiable demand for compute. That’s turned CoreWeave into a pillar of the obscenely expensive AI infrastructure build-out that’s turned markets inside out over the past year.
CoreWeave itself went public this past March, and it’s worth almost $50 billion today. Just this year alone, CoreWeave has signed multiple contracts worth tens of billions of dollars with companies like Meta and OpenAI for access to its data centers.
But what Liz has found is that the story of CoreWeave is a whole lot more complicated than a few Wall Street types making some smart bets and getting 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 to Nvidia itself.
In many ways, Liz says, CoreWeave could not exist without extraordinary levels of financial investment from Nvidia — and from the value the AI industry is putting on Nvidia’s stock, on its chips, and on the wholesale transformation of the economy that AI is supposed to deliver at some point in the future.
So I wanted to ask Liz what it means that CoreWeave is so dependent on Nvidia, for the AI industry is growing so dependent on CoreWeave, and what might happen in a world where the AI bubble actually pops.
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