That’s why many people think of AI as a bubble. That includes OpenAI CEO Sam Altman, who continues to say AI is a bubble, yet raises and spends huge sums of money in ways that look like indicators of a bubble to everyone else. This is all pretty confusing. So we sent Verge Senior reporter Liz Lopat is out to report on the AI bubble. Is the AI bubble real, how will it burst, and what does it all mean?
she is participating decoder Today I would like to talk about a specific company that is located in the middle of this. The company is called CoreWeave, and Liz has spent quite a bit of time talking about its history, financials, and the really interesting story it all tells us about the modern AI boom. Liz will have a big talk about all this next week The VergeSo if you want to know more after listening to this episode, stay tuned.
But to me, the basics of the CoreWeave story itself are interesting. CoreWeave was founded as an Ethereum mining company in New Jersey by a former commodity trader. Like many in the tech industry, CoreWeave pivoted to AI when cryptocurrencies were disrupted. I started using the same GPUs I had stockpiled to mine Ethereum to start my own data center operation.
CoreWeave’s big innovation is creative financing. The company has raised billions of dollars to build data centers powered by Nvidia GPUs and leases that computing to leading AI companies to meet the industry’s insatiable computing demands. This has made CoreWeave a pillar of the prohibitively expensive AI infrastructure construction that has upended the market over the past year.
CoreWeave itself went public in March of this year and is currently valued at nearly $50 billion. This year alone, CoreWeave has signed multiple contracts worth tens of billions of dollars with companies like Meta and OpenAI for data center access.
But what Liz discovered is that Coreweave’s story is much more complicated than a few Wall Street types making smart bets and getting rich. In fact, the entire story surrounding CoreWeave, that it’s a company harvesting the AI gold rush, is built around highly complex financial maneuvers and a unique relationship with Nvidia itself.
In many ways, Liz says CoreWeave would not exist without the extraordinary level of financial investment from Nvidia. It’s also possible because of the value the AI industry places on Nvidia stock, its chips, and the massive economic transformation that AI is expected to enable at some point in the future.
So I wanted to ask Liz what CoreWeave’s heavy reliance on Nvidia means, how the AI industry has become so dependent on CoreWeave, and what would happen in a world where the AI bubble actually burst.
If you’d like to learn more about what we covered in this episode, check out the links below.
Have questions or comments about this episode? Contact us at decoder@theverge.com. We really read every email.
