Meta strikes expanded $14.2B AI infrastructure deal with CoreWeave – News

Shares of the cloud data center company CoreWeave Inc. jumped more than 11% in regular trading today after it announced it has signed a new multibillion-dollar agreement with Meta Platforms Inc. to provide it with much-needed artificial intelligence compute infrastructure.

The contract requires Meta to pay CoreWeave $14.2 billion for its AI infrastructure services over the next six years, with an option to extend the deal by an additional year, until December 14, 2032, the company said in a filing with the U.S. Securities and Exchange Commission today.

It’s a significant bounty for CoreWeave, and it comes at a time when big technology firms like Meta are scrambling to lock in access to the infrastructure they need to power their AI initiatives, boosting the value of companies that can provide it.

CoreWeave is perfectly positioned to do just that. The company was virtually unheard of a year ago, but its rise has been astonishing. It has emerged as a key mover and shaker in the AI industry because it operates numerous data center facilities around the world that provide companies with access to the most treasured resource: graphics processing units, which power the majority of the world’s AI workloads today.

Through CoreWeave’s cloud infrastructure, companies can access some of Nvidia Corp.’s most powerful new GPUs, which are designed to provide accelerated computing power for large language models. CoreWeave, which went public earlier this year, has spent billions of dollars on building up a network of data centers spanning North America and Europe. As of last year, it had 28 facilities up and running, with plans to complete 10 more by the end of this year.

CoreWeave is rivalled by a number of other cloud infrastructure providers that are laser-focused on AI, including Nebius Group N.V., Lambda Inc., Crusoe Energy Systems LLC and Nscale Global Holdings Ltd., but it has emerged as the biggest name among that group.

The expanded deal with Meta is crucial for CoreWeave because it’s reliant on only a handful of customers. At present, the bulk of its revenue is thought to come from Microsoft Corp., although last week it announced it had expanded an existing deal with OpenAI to train its new models by $6.5 billion, bringing the total value of its contracts with the ChatGPT maker to $22.4 billion. CoreWeave also serves AI developers such as Cohere Inc. and Mistral, though its contracts with those companies are much smaller.

In an interview with Bloomberg, CoreWeave Chief Executive Michael Intrator said today’s deal will see it provide Meta with access to Nvidia’s latest GB300 GPU systems. Those advanced chips are critical for the social media giant, which hopes to leverage AI to enhance the capabilities of new consumer products such as its newly launched Ray-ban smart glasses.

Meta has spent tens of billions of dollars on expanding its access to data center infrastructure over the last few years. In April, it said it will increase its capital expenditure to $72 billion this year, with the majority of that being spent on AI data centers. The company is spending through the nose to try and remain at the forefront of AI model development, and not just on infrastructure. In addition, it has been spending millions in order to entice some of the world’s top AI engineers to join its development teams.

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