Microsoft leases CoreWeave servers

Microsoft Corp. will reportedly spend nearly $10 billion between 2023 and 2030 to rent servers from artificial intelligence (AI) startup CoreWeave to run AI models.
The report said Microsoft is likely to be CoreWeave's largest customer, and the $10 billion amount is larger than previously known, accounting for more than half of the total $17 billion in contracts CoreWeave has signed with customers. CoreWeave and Microsoft did not immediately respond to requests for comment.
According to previous reports, Nvidia-backed CoreWeave is preparing for an initial public offering (IPO) in the first half of 2025.
Recently, CoreWeave obtained a $650 million credit line from several investment banks. Prior to the credit facility, CoreWeave raised $12.7 billion in equity and debt financing in the past 12 months, including a $7.5 billion debt financing in May. It also raised a $2.3 billion loan from some investors in August 2023 - with Nvidia's AI chips as collateral.
CoreWeave, headquartered in Roseland, New Jersey, was founded in 2017. The company has 14 data centers (one of which is used to rent Nvidia's artificial intelligence chips) and plans to have 28 data centers by the end of the year.
Recently, Microsoft's first quarter financial report for fiscal year 2025 showed that Microsoft's revenue in the first fiscal quarter was US$65.6 billion, a year-on-year increase of 16%. Net profit was US$24.7 billion, a year-on-year increase of 11%. The cloud business resumed its growth rate in the first fiscal quarter. Microsoft expects the revenue of the intelligent cloud to increase by 18% to 20% in the next fiscal quarter, and will continue to increase expenses.
In the first fiscal quarter, Microsoft's intelligent cloud department had revenue of US$24.1 billion, a year-on-year increase of 20%. Among them, Azure and other cloud service revenue increased by 33%, higher than the previously expected growth rate of 28% to 29%. About 12 percentage points of Azure's growth came from AI services.
Regarding the performance of the cloud business, Microsoft Executive Vice President and Chief Financial Officer Amy Hood said in the earnings call: "The increase in market demand for the Microsoft Cloud platform has driven performance. In addition, the number of Azure contracts over $100 million has increased."
Recently, technology giants such as Microsoft and Meta are increasing their investment and vigorously building artificial intelligence data centers to meet huge demand. Beatrice Wahl, an analyst at Global Data, told Reuters: "The cost of developing AI technology is high. It is expensive to obtain AI capacity, and it takes time to see benefits and widespread application of AI technology."
Although chip companies such as Nvidia are trying their best to meet the demand for chips in data centers, AMD said that the market demand for AI chips far exceeds supply, and the tight supply of AI chips may continue until next year. Mark Zuckerberg, CEO of Meta, said: "Maybe investors don't want to hear about building infrastructure in the short term, but I think there are indeed great opportunities here. We will continue to invest heavily in the field of artificial intelligence infrastructure."