Billion-Dollar Partnership: CoreWeave and OpenAI Intensify Collaboration

CoreWeave, a leading provider of AI cloud services, has significantly expanded its partnership with OpenAI through a new agreement valued at up to $6.5 billion. This brings the total value of agreements between the two companies to an impressive $22.4 billion. This is the latest in a series of billion-dollar deals OpenAI has signed to secure computing power. The latest expansion marks the third significant intensification of the partnership this year. In March, the company behind ChatGPT agreed to an initial cloud deal with CoreWeave worth up to $11.9 billion, followed by a $4 billion expansion in May. These developments highlight the growing collaboration as OpenAI seeks multiple partners to support the unprecedented expansion of data centers needed to meet increasing demands. In parallel, significant progress is being made on OpenAI's "Stargate" infrastructure project. It was recently announced that OpenAI plans to open three new locations with Oracle, with their cloud partnership amounting to a considerable $300 billion over the coming years. Additionally, OpenAI is planning two more data centers with the support of SoftBank. In pre-market trading, CoreWeave shares trimmed their losses, falling by about 4%. Overall, the Stargate project plans for nearly 7 gigawatts of capacity and investments of over $400 billion in the next three years. OpenAI aims to secure a total of 10 gigawatts of capacity with investments of up to $500 billion. This series of agreements underscores the alignment of interests among major tech companies in developing advanced AI. However, it also raises questions about "circular" financing within the industry and whether capital will continue to flow unimpeded. Nvidia announced earlier this week its intention to invest up to $100 billion in OpenAI and provide chips for data centers. This partnership links two of the most prominent players in the AI race and has raised concerns regarding competition law. Nvidia holds more than a 5 percent stake in CoreWeave and secured a substantial hardware purchase agreement valued at $6.3 billion, guaranteeing that Nvidia will buy all unsold cloud capacity.