CoreWeave is experiencing a significant rise in value following Microsoft’s substantial $17.4 billion agreement with Nebius, which underscores the ongoing demand for artificial intelligence compute resources within the data center sector. The deal illustrates the pressing need for diversified capabilities in AI data centers, highlighting the market’s shift towards robust infrastructure that can support advanced computing tasks.
A contributing factor to CoreWeave’s surge may be its impending acquisition of Core Scientific, a move that positions the company favorably against Microsoft’s leasing of broader and more advanced AI data center capabilities from Nebius. Initially, CoreWeave’s stock deal to acquire Core Scientific was valued at approximately $9 billion. However, the valuation has adjusted downward by about 40% due to a decline in Core Scientific’s share prices. Nevertheless, this acquisition represents a strategic financial advantage, as CoreWeave is estimated to save around $10 billion in leasing costs over the next 12 years compared to what they would have paid to access data center infrastructure through traditional means.
Currently, Microsoft is set to access approximately 300 megawatts of data center power from Nebius, which contrasts sharply with Core Scientific’s reported capacity of over 1,300 megawatts. At first glance, this disparity could suggest that CoreWeave is making a highly advantageous move. However, it’s crucial to acknowledge that not all AI computing infrastructures are equivalent; the types and capabilities of the offerings vary significantly between providers.
Nebius operates with a “full stack” model that includes ownership of GPUs and a robust software layer tailored for AI applications. In contrast, Core Scientific employs a “colocation” approach that lacks the same depth of resources, particularly in terms of GPU access. This distinction highlights the complexities involved in evaluating offerings from different companies in the AI compute space.
Once the acquisition of Core Scientific is finalized, CoreWeave is set to enhance its own operational model, aligning it more closely with the successful framework established by Nebius. This shift mirrors a trend as leading hyperscalers are increasingly willing to invest in comprehensive solutions that deliver high-value AI infrastructures. As the AI landscape continues to evolve, the strategies employed by companies like CoreWeave will be crucial in meeting the skyrocketing demand for efficient and powerful computing resources.
