CoreWeave’s $25 Billion AI Expansion Amid Rising Debt

CoreWeave, a New Jersey-based cloud provider specializing in GPU infrastructure for AI development, has secured over $25 billion in debt and equity since early 2024 to fuel its rapid expansion. The company reported Q2 revenues of $1.21 billion, a 207% year-on-year increase, but also a net loss of $290.5 million. CoreWeave’s aggressive spending includes a $2.9 billion capital expenditure in Q2, the highest in its history, as it builds data centers to meet surging AI demand.

The company’s CFO, Nitin Agrawal, highlighted the $25 billion funding as critical for scaling its AI cloud platform. However, interest expenses jumped to $267 million in Q2, up from $67 million a year ago. CEO Michael Intrator emphasized the company’s goal to deliver 900 megawatts of active power by year-end and its proposed $9 billion acquisition of Core Scientific, which would add 1.3 gigawatts of power capacity. Despite growth, CoreWeave’s operating margin fell to 2%, partly due to stock-based compensation costs.

CoreWeave’s heavy reliance on a few clients, including Microsoft and Nvidia, raises sustainability concerns. Microsoft alone accounted for 62% of its 2024 revenue. The company forecasts 2025 revenue between $5.15 billion and $5.35 billion but warns of significant Q4 capital expenditures. While demand for AI services grows, CoreWeave’s high debt and narrow customer base pose risks to its long-term stability.

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