Cloud provider CoreWeave said it has signed a new $6.5 billion agreement with OpenAI, expanding its existing partnership with the ChatGPT developer. CoreWeave announced in March that it would provide OpenAI with data centers and AI technology for five years under the $11.9 billion agreement. In May, the amount was increased. now the total contract volume has reached $22.5 billion.
CoreWeave, which went public in March, earns money by renting data centers equipped with Nvidia AI chips. Nvidia is one of the company's investors (as of June 30, it owned about 6.6% of shares), while CoreWeave receives a significant portion of its revenue from Microsoft, one of OpenAI's key investors.
On Sept. 15, CoreWeave announced a new $6.3 billion contract with Nvidia that guarantees to buy out the company's idle data center capacity through 2032.
CoreWeave shares jumped 1.9% to $136 in trading on Sept. 25. The securities have strengthened more than 46% over the past month and have received several buy recommendations from Wall Street analysts. "With new agreements with Nvidia, other cloud customers, and our forecast that CoreWeave will receive a slew of additional contracts, we are raising estimates as the company begins to monetize available power capacity," Ben Reitzes of Melius Research wrote on Sept. 23. He upgraded shares of cloud provider CoreWeave from Neutral to Buy and raised its target price from $128 to $165, suggesting a potential upside of a quarter relative to the company's last close.
This article was AI-translated and verified by a human editor
