WSS: CoreWeave set to go public and continues to build footprint as data centre operators raise capital to support it
AI continues to develop and the massive infrastructure needed to support it is being built out by hyperscalers and a new generation of cloud providers working from within the NVIDIA ecosystem. CoreWeave is the poster child for this new breed of cloud provider that has benefitted from demand coming from the rapid growth of AI at Microsoft and support and infrastructure uptake from NVIDIA itself. CoreWeave has grown at an aggressive pace and in three years has built up an annual revenue base of nearly $2b. These numbers were revealed in its recent S-1 filing as CoreWeave looks to take advantage of the momentum and go public. We took an in-depth look at the filing and the details of our analysis can be found in our regular research offering.
One of the interesting takeaways from an infrastructure perspective is the fact that CoreWeave uses colocation exclusively, but has left the door open to self-building data centres at some point in the future – something that would be typical of the hyperscale status it aspires to. CoreWeave sees its ability to procure and deploy power – in a timely and efficient fashion, as it puts it – as a part of its overall value proposition. The key point of differentiation, however, is the software platform that not just manages GPU cloud infrastructure, but optimizes, monitors and enables model training environments. And CoreWeave is set to grow at an even faster clip going forward. After filing its S-1, CoreWeave disclosed that OpenAI would become a major customer, signing a multi-year contract worth almost $12b. It will almost double CoreWeave’s annual revenue and take it closer to $4b. These are truly astounding numbers.
Investments in infrastructure continue at a steady pace and look to be accelerating. We are set to publish our 4Q24 M&A report and our tracking showed a meaningful uptick in capital raising activity – from both a debt and equity perspective – for hyperscale and GPU cloud data centres. Infrastructure is being built to support demand and it shows no signs of slowing down. One of the providers, EcoDataCenter, secured €450m in new funding, and is known to be building data centre capacity for CoreWeave’s European nodes that are based in Sweden. EcoDataCenter was not mentioned in the CoreWeave S-1, along with other operators known to be working with CoreWeave on data centres, but Core Scientific was identified and we have some details on its recent earnings report. CoreWeave has contracted to lease 500MW of capacity from Core Scientific in the US.
Moving to APAC, there continues to be significant activity in Thailand. In the past week, we saw ByteDance confirm plans to increase its investment in Thailand across data centre infrastructure, skills and training, while STT GDC is expanding its footprint to support the early stage growth in Thailand’s hyperscale market. Thailand is a rapidly emerging market and there are operating platforms looking to support the infrastructure from a master planning perspective. Doma Infrastructure Group is a new entrant to the market and we will have some more details about its progress next week.
The past week also saw us publish our Quarterly Infrastructure Bulletin for the 4Q24 period. We take a closer look at how stabilization has settled in with demand signals around sales pipelines, KPIs, growth and CapEx all pointing in a positive direction. Meanwhile, business models continue to pivot amid ongoing transformation within the landscape and self-build strategies have become a bit of a moving target. The self-build is at the centre of the debate around the sector’s overall health as bears emerge that are questioning the state of supply and demand, and fear that an overbuild situation may emerge. We look into why that is not likely to be the case. The market will become more challenging, and operators will have to engage in some level of speculation and anticipation when playing the hyperscale game, but the growth trajectory is sure be consistent and there are more tailwinds than headwinds these days.
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