OpenAI is significantly ramping up its artificial intelligence infrastructure capabilities, committing up to an additional $4 billion for cloud computing resources from CoreWeave, a specialized provider. This expanded agreement, which runs through April 2029, was confirmed in a CoreWeave regulatory filing on May 15, following an earlier, less specific mention of a major deal during the company’s May 14th earnings call. The move signals the intense, ongoing demand for powerful graphics processing units (GPUs), crucial for training and deploying increasingly complex AI models.
This fresh capital commitment provides a significant vote of confidence for CoreWeave, which recently navigated a somewhat turbulent initial public offering in March. The company is now aggressively scaling its operations, planning a substantial $20 to $23 billion in capital expenditures for 2025 to build out its AI-focused data centers. For OpenAI, the deepened partnership is a key part of its strategy to secure and diversify the massive computational power it needs, reducing its historical reliance on Microsoft Azure, a shift reportedly bolstered by SoftBank’s major investment in the AI research and deployment company.
The new $4 billion deal substantially adds to a prior five-year, $11.9 billion agreement inked in March, which also included OpenAI taking a $350 million equity stake in CoreWeave. This latest development pushes CoreWeave’s reported backlog to at least $29.9 billion, a notable increase from the $25.9 billion stated at the end of the first quarter of 2025. CoreWeave CEO Mike Intrator told CNBC that this new OpenAI commitment was “a real articulation of new uptake,” with more clients buying more infrastructure over the balance of the year.
CoreWeave’s High-Stakes Growth Trajectory
CoreWeave’s public debut on Nasdaq in March was priced at $40 per share, below its initial target range, according to MarketWatch, raising $1.5 billion. Despite this, the company’s stock has shown volatility, including a mid-day rally on May 15,partly influenced by robust capital expenditure forecasts from tech giants like Microsoft and Meta.
In its first earnings release as a public company, CoreWeave CEO Michael Intrator stated they have “delivered an outstanding start to 2025 on multiple fronts,” noting their strong Q1 financial performance capped milestones like their IPO, the OpenAI deal, customer wins, the Weights & Biases acquisition, and technical achievements. The company announced first-quarter 2025 revenue of $981.6 million, a 420% year-over-year surge, and projected annual revenues for 2025 between $4.9 billion and $5.1 billion.
However, this aggressive expansion is exceptionally capital-intensive. CoreWeave’s second-quarter capital expenditure is projected at $3 billion to $3.5 billion, while revenue expectations for the same period are $1.06 billion to $1.1 billion. The company recorded a net loss of $863 million in 2024, with a Q1 2025 net loss per share of $1.49, partly due to IPO-related stock compensation.
To manage its finances, CoreWeave has been actively seeking to refinance existing high-interest debt, indicating efforts to raise $1.5 billion or more, potentially including unsecured high-yield bonds. This financial maneuvering occurs as the company faces approximately $8 billion in total debt (as of December 2024) and significant upcoming payment obligations. CFO Nitin Agrawal commented that CoreWeave’s strong Q1 financial performance underscores a large, rapidly growing opportunity, emphasizing their focus on execution and effective capital management to support growth and strategic flexibility.
Navigating Big Tech Alliances and Market Perceptions
The expanded OpenAI relationship unfolds against a dynamic backdrop of CoreWeave’s interactions with other tech behemoths. Microsoft, previously accounting for 62% of CoreWeave’s 2024 revenue, chose not to exercise a $12 billion contract option with the cloud provider before its IPO.
CoreWeave has consistently pushed back against any suggestions of instability stemming from such decisions, with a spokesperson previously asserting to Winbuzzer that there have been “no contract cancellations or walking away from commitments.” Microsoft’s CEO, Satya Nadella, has also characterized such infrastructure adjustments as standard procedure, albeit now under greater scrutiny.
Despite these shifts, the demand for CoreWeave’s specialized Nvidia GPU-based cloud services remains strong. Beyond OpenAI, Google has reportedly been in advanced discussions to lease Nvidia’s latest Blackwell B200 GPUs from CoreWeave, signaling broader market interest. This intense demand, however, also highlights CoreWeave’s reliance on Nvidia, its key technology partner and a significant investor.
Nvidia itself has faced production hurdles in 2024, including earlier design-related delays with its Blackwell B200 GPUs, a factor that could pose ongoing supply chain risks for CoreWeave. The company’s own SEC filing acknowledged that negative changes in demand from major clients like Microsoft could adversely affect its business. However, with the new OpenAI deal, the current mid-term outlook for the company seems positive.
Analyst Views and Future Outlook
Analyst sentiment on CoreWeave following its Q1 results has been mixed. While some firms like Stifel raised their price targets, with analyst Ruben Roy expressing continued positive views on its market position, stating, “we continue to view CRWV’s longer-term prospects positively given the company’s first to market positioning as a purpose built AI infrastructure provider.”
Others like DA Davidson downgraded the stock, with analyst Gil Luria reportedly cautioning that “investors regretted scaling WeWork (OTC:WEWKQ), and they may not want to scale this business,” drawing parallels to WeWork’s scaling challenges. The MoffettNathanson brokerage also noted that “the cost of preparing to meet this demand may spook investors” as per Reuters.
Nevertheless, CoreWeave’s leadership remains bullish, with Intrator declaring in the earnings release that demand for their platform is robust and accelerating from AI leaders seeking high-performance infrastructure. He emphasized they are “scaling as fast as possible to capture that demand,” concluding with the confident assertion, “The future runs on CoreWeave.”
The company’s ability to manage its rapid, capital-intensive growth while navigating the complex demands and shifting strategies of a few powerful AI players will be critical to its long-term success in this high-stakes market.
