Today's news that AI cloud computing startup CoreWeave has raised $1.1 billion in funding at a staggering $19 billion valuation (it was valued at $7 billion four months ago) probably made many people think. You must have wondered. “Who exactly is CoreWeave?”
In the spirit of Field of Dreams' “If you build it, they will come”, imagine the following scenario. The company, founded by three commodity traders, operates out of a data center in New Jersey. Their cryptocurrency mining hobby turned into an Ethereum mining company that uses Nvidia GPUs (graphics processing units) to validate blockchain transactions. The company pivoted to building a specialized cloud infrastructure with lots of GPUs on top. This turned out to be perfect for the generative AI boom at the end of 2022. AI companies around the world suddenly needed speed to train and run models at scale. And they are lining up to rent access to the highly sought-after GPUs on this new cloud. This created a gold mine of demand that was brighter than the trio could have imagined.
That's the unlikely story of Roseland, New Jersey-based CoreWeave in a nutshell. The company was founded in 2017 and has now raised a total of $3.5 billion to develop and build hardware and software to support CEO and co-founder Michael Intrator.In an interview with luck This is a “very special use case in the cloud,” training and running AI models at scale, and requires “massive” infrastructure.
“We're building the biggest supercomputer on Earth, and we're building it again and again and again,” he said. “That's what CoreWeave is uniquely qualified to do…That's why we've been able to scale the way we have.” CoreWeave hosts his website and data his lake. I have not. For example, cloud infrastructure is purposefully built to power “some of the world's most sophisticated compute-intensive workloads.”
In December 2023, the company announced that it had completed a $642 million secondary investment, following a $420 million first round led by Magnetar in April 2023. In August, Coreweave secured a $2.3 billion debt financing facility led by Magnetar and Blackstone. Also in the last year, CoreWeave has increased its data center presence from three to 14 (with 14 more under construction) and quadrupled its employee count to more than 550.
The $1.1 billion new funding was led by Coatue, with participation from Magnetar, Altimeter Capital, Fidelity Management & Research Company, and Lykos Global Management. According to a press release, the new funding will support CoreWeave's new geographies to meet “rapid growth across all areas of the business and explosive demand for GPU-accelerated cloud infrastructure around the world.” It will be used to support the expansion of the
Maserati, not a minivan in the AI cloud
the interator said luck He always explains the power of CoreWeave in automotive terms. He argued that the legacy cloud is a minivan. “You can take your kids to a soccer game, you can drag your college roommate's couch across campus, you can do anything with it, and it's been incredibly effective.” he said. “We didn’t create it.”
Instead, the CoreWeave team went back to the drawing board to understand what companies need to build and run AI models. “What are you going to build? A Maserati,” he said. “We've built a high-performance solution that doesn't have to make any compromises to build a vehicle that can do all the different tasks. We just want to go fast.”
Intrater also argued that what people don't tend to “get” about CoreWeave is that its services are at the root of the generative AI boom. “I think of it as a series of base layers,” he explained. “There is GPU intellectual property with Nvidia. As a physical build he has TSMC [of the GPUs]. There is also a data center. And there we are too. ”
In many ways, CoreWeave is an “incredibly pure, distilled moment of people's investment in AI,” he continued. In short, CoreWeave is incredibly specialized and helps the world use artificial intelligence: building and running artificial intelligence. “We're not the only ones” doing this, he added. “But we are one of the few companies that can build this scale,” he added.
No one knew how high the need for scalable AI infrastructure would grow
However, CoreWeave's secret sauce is also its access to Nvidia GPUs and its technology. The company has certainly benefited from his Nvidia efforts to maintain an edge in the AI space and compete with other cloud providers such as Amazon, which are developing their own chips. Nvidia invested in CoreWeave in 2023 and allocated a large number of GPUs to the company (although Intrator notes that “we don't have preferential access to their GPUs; they prefer us over Amazon”). (He insisted that there was no such thing.)
The impressive valuation announced by CoreWeave on Wednesday makes sense in all contexts related to NVIDIA, said Daniel Newman, principal analyst at Futurum Research. “Because now, [GPUs] It’s a rare item,” he said. But Neumann believes CoreWeave's access to his Nvidia silicon and focus on ultra-specialized AI workloads will be a sustainable long-term business, especially once the AI chip shortage eases. I'm wondering if that's the case.
“I feel like Microsoft, Google, AWS, and other companies are not going to sit back and do their jobs. [cloud] “Customers will go elsewhere,” he said. (Microsoft reportedly signed a deal with CoreWeave a year ago to boost GPU capacity for OpenAI worth billions of dollars; (Newman said it was only to address short-term capacity challenges.) But, he added, “there's no question that computing is a good market to be in.”
Intrater emphasized that the company's performance was strong as it executed on its business plan. “The most knowledgeable investors in this space, the most knowledgeable students, have come back and invested in us time and time again,” he said.
He also said that when he and his co-founders, chief strategy officer Brian Venturo and chief development officer Brannin McBee, were mining cryptocurrencies, they had no idea what the market would be like. He also admitted that. They understand that GPUs can have other uses if they build software that is “infinitely scalable” and that Ethereum is just one of several “silos” in the cloud. I was there.
But little did they know that one of those silos, AI, would change the world. “I would argue that no one understands it,” Intrater said. “Everyone was on the back foot.”