CoreWeave shares jumped 13% Tuesday after announcing a US$14.2 billion computing power agreement with Meta, running through December 2031 with options extending to 2032.
The deal came just days after CoreWeave expanded its OpenAI agreement by US$6.5 billion, bringing that total contract to US$22.4 billion.
The neocloud play
CoreWeave operates what investors call "neoclouds" - data centres packed with Nvidia graphics processing units that get rented out to AI developers.
Build data centres full of Nvidia's latest chips (in this case, the GB300 systems), then lease that computing power to companies racing to train and run massive AI models.
Meta's been pouring tens of billions into AI infrastructure, with 2025 expenses expected between US$114 billion and US$118 billion.
CEO Mark Zuckerberg is building superclusters the size of Manhattan.
The company's Hyperion facility is expected to cover a significant part of Manhattan's footprint, whilst Meta aims to have 1.3 million GPUs operational by year-end.
Diversification
CoreWeave CEO Michael Intrator admits the company got dinged during their IPO for customer concentration - Microsoft historically accounted for 71% of revenue in the June quarter.
This Meta deal changes that equation, because combined with the expanded OpenAI contract, CoreWeave is building a customer base across the AI development sector.
The company's US$60 billion valuation reflects this, though it also highlights bubble concerns some analysts are raising about circular financing in AI infrastructure.
Debt-fuelled infrastructure spending
Neoclouds are capital-intensive operations requiring constant debt market access.
Intrator has confirmed CoreWeave will tap the debt markets periodically as expansion continues - because data centres housing cutting-edge GPUs don't come cheap.
They're not alone. Meta raised US$29bn for a Louisiana data centre, while Oracle pulled US$18bn in bonds for OpenAI infrastructure too.
The Meta contract provides CoreWeave with revenue visibility through 2031, though capex to fulfil the contracts remains substantial.
