Shares of bitcoin miner Core Scientific fell by 15% in pre-market trading on Thursday due to reports about Microsoft scaling back some agreements with CoreWeave, a cloud computing firm preparing for a public listing. Core Scientific had earlier announced ambitious plans for a $1.2 billion data center expansion in partnership with CoreWeave, which has become crucial in delivering AI computing power.
This week, CoreWeave submitted its initial public offering (IPO) documents, aiming to raise $4 billion at an impressive valuation of $35 billion. This IPO represents a significant moment in the tech sector, especially considering the growing importance of AI technologies. CoreWeave has faced certain challenges recently, including delivery issues and missed deadlines, which influenced Microsoft’s decision to recalibrate its commitments.
Nonetheless, Microsoft continues to be a vital partner for CoreWeave, contributing 62% of its overall revenue. Microsoft has committed over $10 billion in expenditures related to CoreWeave by the year 2030, showcasing the deep financial ties between the two entities. Despite a robust revenue generation of $1.9 billion in 2024, CoreWeave has reported considerable losses, which highlight the pressures faced by many firms in the rapidly evolving tech landscape. The firm’s reliance on Nvidia’s AI chips has placed additional strains on its financial operations, having raised $14.5 billion through various debt and equity channels to sustain its growth.
Microsoft's strategic adjustments in its agreements with CoreWeave illustrate the shifting dynamics of the AI infrastructure landscape, yet Microsoft is still firmly investing in the sector. The intricacies of these developments occur under a broader context of changing trends within technology and AI industries.
U.S. President Donald Trump has yet to comment on these unfolding events, which may significantly influence market perceptions and investor confidence moving forward..