CoreWeave, a cloud computing provider focused on Nvidia-based GPU infrastructure, will supply computing capacity to Google Cloud as part of a new partnership with OpenAI.

Under this agreement, Google will offer CoreWeave’s computing resources alongside its own to support services like ChatGPT.

None of the companies—CoreWeave, Google, or OpenAI—have publicly commented on the deal.

The partnership reflects shifting dynamics in the cloud industry, where major players like Google collaborate with specialized firms like CoreWeave.

CoreWeave went public in March and secured a five-year, US$11.9 billion contract with OpenAI, later expanded by an additional US$4 billion.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ The shifting alliances in AI computing represent a new phase of cloud wars

CoreWeave’s new role in Google and OpenAI’s partnership highlights a fundamental shift in how cloud infrastructure is being allocated in the AI era.

Traditional cloud market dynamics are evolving from the established “Big Three” dominance, where AWS (30%), Microsoft Azure (21%), and Google Cloud (12%) controlled over 60% of the market 1, to a more complex ecosystem featuring specialized providers.

This partnership is particularly strategic for Google Cloud, which at 12% market share 2 significantly trails AWS, allowing it to capture revenue from OpenAI’s growth while positioning itself as a neutral AI infrastructure provider despite competing with OpenAI in products.

For CoreWeave, adding Google as a customer creates critical revenue diversification, reducing dependence on Microsoft, which previously accounted for 62% of its 2024 revenue 3.

The arrangement reflects how AI’s computing demands are forcing even direct competitors to form pragmatic partnerships.

2️⃣ The economics of AI infrastructure reveal massive capital requirements

CoreWeave exemplifies the extraordinary economics of AI infrastructure companies, with 700% year-over-year revenue growth to $1.92 billion in FY2024 4 and a market valuation that has surged over 300% since its IPO 4.

Behind this growth lies enormous capital intensity. CoreWeave has raised over $15 billion to support its infrastructure expansion 4 while simultaneously securing $25.9 billion in contract backlog, including the $11.9 billion OpenAI deal mentioned in the news 4.

This financial profile resembles early cloud infrastructure buildouts but with significantly higher capital requirements, as AI-optimized data centers can cost 3-4 times more than traditional facilities due to specialized cooling and power needs.

CoreWeave’s strategic relationship with NVIDIA, which holds a 78% equity stake 5, illustrates how GPU manufacturers are vertically integrating into the cloud service provider space.

Despite the revenue growth, CoreWeave reported a substantial net loss of $314.6 million in Q1 2025 5, highlighting the tension between rapid infrastructure scaling and profitability that characterizes the current AI computing gold rush.

3️⃣ The rise of specialized cloud providers signals market maturation

CoreWeave represents a new category of “neocloud” providers that are carving out specialized niches in the $766 billion cloud computing market 6 by focusing exclusively on GPU-optimized infrastructure for AI workloads.

The company’s approach differs fundamentally from general-purpose cloud providers by offering purpose-built infrastructure optimized specifically for AI applications, with faster provisioning and lower latency 7.

This specialization has attracted significant customer commitment, with CoreWeave securing over $26.5 billion in long-term contracts 7, demonstrating that major AI developers are willing to make substantial multi-year commitments rather than rely solely on spot market capacity.

The emergence of specialized providers parallels previous industry evolutions where generalists initially dominated before vertical-specific players emerged.

CoreWeave’s P/S ratio of 172.53 3 reflects both extreme investor optimism and the premium markets are placing on specialized AI infrastructure, substantially higher than traditional cloud providers.

Recent CoreWeave developments

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