Microsoft has signed a deal with CoreWeave, a provider of AI computing power, that could be worth billions of dollars over a number of years. The news was disclosed by sources familiar with the matter, to CNBC.
While Microsoft and CoreWeave have failed to confirm the information, the sources told CNBC that the deal was made to ensure that OpenAI’s ChatGPT had enough computing power going forward. Through a partnership with Microsoft, OpenAI currently uses Microsoft Azure infrastructure to run ChatGPT, which is resource intensive. It seems that the agreement was made earlier this year.
In recent weeks, we’ve seen the price of NVIDIA’s shares rocket up as investors anticipate higher earnings for the company on the back of generative AI services like ChatGPT. CoreWeave offers cloud computing services also powered by NVIDIA hardware.
The revelation about this deal comes just one day after CoreWeave announced that it had secured $200 million in a Series B funding extension, bringing the round’s total to $421 million. The $200 million was invested by Magnetar Capital.
According to CoreWeave, the funding is helping it fill a gap in the market that legacy cloud computing providers are struggling to fill.
“By combining easy access to high-powered GPUs for training AI models with fast and flexible infrastructure and by focusing on a specific type of compute, CoreWeave continues to differentiate itself from other companies in the space,” said Ernie Rogers, Magnetar’s chief operating officer.
“Magnetar believes CoreWeave sits in a sweet spot for enabling world-class results across a number of industries. We are proud to have been the lead investor for CoreWeave’s Series B funding round and its extension.”
Now that knowledge of this agreement is public, it could add even more fuel to NVIDIA’s stock price as it suggests the company could see even more demand for its products as CoreWeave seeks to provide resources for Microsoft and OpenAI.