OpenAI has signed a contract worth nearly $12 billion with CoreWeave and will take a stake in this cloud computing service provider, thereby strengthening OpenAI ahead of the expected public stock offering valued at $35 billion.
The creator of ChatGPT has signed a five-year agreement in which CoreWeave will supply computing power for training and running OpenAI’s artificial intelligence models using its cloud infrastructure, which is based on high-performance computing resources, such as Nvidia’s graphics processing units (GPUs). These resources enable the efficient execution of complex calculations required for the development and operation of artificial intelligence models.
Training artificial intelligence models, such as those used by OpenAI, requires enormous amounts of computing power. Instead of OpenAI building its own data centers or overly relying on Microsoft’s cloud services, with which it already collaborates, they decided to partner with CoreWeave.
CoreWeave utilizes high-performance graphics processing units that are particularly useful for AI tasks as they allow for the parallel execution of large numbers of calculations, which is crucial for training deep neural networks and other complex models. Given that CoreWeave has over 250,000 Nvidia GPUs, it has the capacity to support large and demanding AI projects, such as those developed by OpenAI.
Microsoft Withdraws
The Financial Times reported last week that Microsoft has withdrawn from a planned contract with CoreWeave due to delivery issues with this service provider. The decision was a blow to the New Jersey-based company, which has filed for an initial public offering in New York this month, where it will attempt to raise about $4 billion.
The new contract with OpenAI, valued at $11.9 billion, helps fill that gap and could lead to OpenAI surpassing the amount Microsoft contributed, which accounted for 62% of CoreWeave’s revenue last year, according to public data. Microsoft had agreed to spend $10 billion on CoreWeave’s services by 2030.
As part of the agreement with CoreWeave, OpenAI will also receive a stake in the company worth $350 million when the IPO is executed, sources familiar with the plans said.
CoreWeave, founded in 2017 as a cryptocurrency mining operation, has transitioned to providing cloud computing services for technology companies looking to build and train AI models using high-performance Nvidia graphics processing units. The company has amassed over 250,000 Nvidia AI GPUs, making it one of the largest buyers of this chip manufacturer.
Sam Altman, co-founder and CEO of the company, claims that infrastructure will be key in the race to build state-of-the-art AI models. On the other hand, Microsoft CEO Satya Nadella recently expressed concerns about ‘overbuilding’ computing capacity as large tech companies invest hundreds of billions of dollars in data centers.
OpenAI has also partnered with SoftBank on a potential $500 billion data center project called ‘Stargate’ and has signed data center agreements with Oracle.
