What You Need to Know:
- Microsoft has withdrawn from some CoreWeave agreements caused by delivery issues, but it continues to be a key partner.
- CoreWeave largely depends on Microsoft for revenue (62%) and faces challenges ahead of its IPO as AI infrastructure strategies evolve.
- The share price of Core Scientific dropped 15% before the market opened.
Shares of bitcoin miner Core Scientific (CORZ) fell by 15% in pre-market trading on Thursday after reports that Microsoft (MSFT) has scaled back from various agreements with the upcoming cloud computing company CoreWeave.
Previously, Core Scientific had announced plans for a $1.2 billion expansion of its data center with CoreWeave, and this week, CoreWeave filed for an initial public offering, with hopes of raising $4 billion at a $35 billion valuation.
According to a FT article, CoreWeave, which provides AI computing power to Microsoft, faced delivery issues, leading Microsoft to reduce its commitments, although it remains a significant partner.
Microsoft accounts for 62% of CoreWeave’s revenue and has committed more than $10 billion for services by 2030. CoreWeave has expanded rapidly, generating $1.9 billion in revenue in 2024 but has faced substantial losses.
It heavily relies on Nvidia’s (NVDA) AI chips and has raised $14.5 billion in both debt and equity financing. Microsoft’s decision aligns with its evolving AI infrastructure strategy but continues its strong investment in the sector.
Disclaimer
Parts of the original article were generated with AI tools and overseen by a human editorial team for accuracy and adherence to CoinDesk’s ethical standards. For additional details, see CoinDesk’s full AI Policy.
