OpenAI Strikes $12B Deal with CoreWeave, Shifting AI Cloud Power

OpenAI has signed a five-year, $11.9 billion agreement with CoreWeave, a cloud service provider specializing in AI computing. As part of the deal, OpenAI will receive $350 million in equity, separate from CoreWeave’s upcoming IPO. Before this agreement, CoreWeave’s largest customer was Microsoft, which accounted for 62% of its revenue in 2024.  Backed by Nvidia, CoreWeave operates AI-focused cloud services with 32 data centers and over 250,000 GPUs, and it has expanded its infrastructure with Nvidia’s latest Blackwell chips. This deal comes amid growing competition between OpenAI and Microsoft. Although Microsoft is a key investor in OpenAI, the relationship has become strained as OpenAI seeks more computing power.  Recently, OpenAI’s CEO Sam Altman expressed concerns about a shortage of GPUs, pushing the company to explore other cloud providers. Meanwhile, Microsoft is developing its own AI model, known as MAI, to rival OpenAI and has recruited Mustafa Suleyman to lead its AI division. The partnership with CoreWeave strengthens OpenAI’s independence and reduces its reliance on Microsoft’s cloud services. It also benefits CoreWeave by diversifying its customer base ahead of its IPO, which aims to raise over $4 billion.  The company has significant debt, but this deal could boost investor confidence. Originally a crypto mining startup, CoreWeave has transformed into a major AI cloud provider, with its founders already cashing out significant shares. With both OpenAI and Microsoft vying for dominance in AI, this agreement marks a strategic shift in the industry. As OpenAI secures its cloud future, the rivalry between the two tech giants is expected to intensify, reshaping the AI landscape.