What Is CoreWeave?

Ed Zitron says CoreWeave is a neocloud, a company that raises debt, buys GPUs, and builds data centers. He calls it the biggest of the neoclouds and the worst of them.

CoreWeave has 30 to 40 billion dollars of debt, and Morgan Stanley has said it will need 100 billion dollars more. He thinks that if CoreWeave raised debt today the rate would be 13 to 15 percent, close to a personal loan, because the neoclouds could never afford the chips out of cash flow. The customers, he says, are Microsoft buying for OpenAI, Google buying for OpenAI, Anthropic, and Meta. Jon Stewart compares the loop to a Beavis and Butt-Head bit in which two kids pass one dollar back and forth until the chocolate is gone and they still hold a single dollar. Ed Zitron says the trade works the same way, except NVIDIA keeps the real dollars. The big hyperscalers, he adds, are not the firms that go bankrupt. CoreWeave is the one with the onerous debt.