CoreWeave in recent years found itself in something of an enviable position.
Unfortunately though, looks like the industry does not need them as much today.
Even worse, CoreWeave is suffocating under a heavy debt burden.
Apple’s data center in southwest China’s Guizhou Province.Photo: Ou Dongqu/Xinhua (Getty Images)
seems as if CoreWeave needed to go public out of a desperate need to pay down debt.
And they need it, tooinvestors demand returns, especially as few companies went public in recent years.
Interest rates and President Trumps tariff strategy have been hurting the broader stock market of late.
Money-losing, risky companies are less attractive when money can be parked in safer places.
CoreWeave, if anything, could be seen as the first barometer of current market stress for GPUs.
OpenAIs Sam Altmanposted on Xyesterday that demand for ChatGPTs new image generator was melting GPUs.
Either way, there is no doubt that CoreWeave seems to be on particularly shaky ground.
What happens as chip prices continue to decline and major tech giantsbuild their own Nvidia competitorsin-house?
And what if the AGI boom does not come to pass?
If there was, Microsoft wouldnt have just pulled out of 2GW of future compute capacity.
Even should generative AI revolutionize the world, it seems the value will concentrate at the app layer.
Foundational language models and hardware are being commoditized.
Companies that can find uses cases and can charge for apps will be the ones that stand out.
CoreWeaves three founders will be fine either way.
They cashed out$500 millionof their holdings between 2023 and 2024.
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Two banks say Amazon has paused negotiations on some international data centers.
