Is the CoreWeave Crash Just Market Volatility?

Jason Calacanis argues the CoreWeave crash is market volatility, not a fundamental break. Underwriting multi-trillion dollar outcomes on exponential rates of growth makes the market super sensitive to present-day data points, so the swings get exaggerated. He does not think something fundamental has changed.

Demand for compute keeps growing by leaps and bounds. The biggest model companies say they are compute constrained. Startups are asking venture capitalists for help getting compute, and some venture capitalists are trying to buy compute as a competitive edge for their startups. One accelerator bought compute and used it to get people to apply. Older chips, the H100s and the A100s, several generations old, still rent at premium prices. They were supposed to be fully depreciated, and they are not. Supply is not flooding in either. Standing up powered compute is slow, rocket scientists find gigawatts of new capacity challenging, and local communities are not racing to give out new entitlements. The constraint is enforced scarcity, not a glut.

Jason Calacanis says there is some indication CoreWeave's costs might be a little higher and the build a little slower. On reputation, CoreWeave is still believed to be excellent at standing up new compute, so he reads the selloff as volatility rather than a deeper crack in demand or supply.