CoreWeave raises $25B for AI cloud amid losses & rapid expansion
CoreWeave, the New Jersey-based cloud provider specializing in GPU-based server infrastructure for AI development, continues its aggressive expansion, fueled by substantial capital injections despite mounting net losses. The company’s latest financial disclosures reveal a strategy of rapid growth underpinned by significant investment, aiming to capture a dominant share in the burgeoning AI infrastructure market.
For the second quarter ending June 30, CoreWeave reported revenues of $1.21 billion, marking an impressive 207 percent increase year-over-year and surpassing analyst expectations. However, this top-line growth was overshadowed by a net loss of $290.5 million for the three-month period. While an improvement from the $323 million net loss recorded in the same period of 2024, the continued unprofitability prompted a 10.4 percent decline in CoreWeave shares during extended trading following the earnings announcement.
The company’s substantial losses are directly linked to its aggressive investment in expanding data center capacity. CoreWeave’s capital expenditure reached a historic high of $2.9 billion in the second quarter alone. This spending spree includes a significant 15-year agreement with Applied Digital, valued at $7 billion, to secure 250 megawatts of data center capacity. CoreWeave CFO Nitin Agrawal revealed that the company has amassed over $25 billion in debt and equity since the beginning of 2024, all dedicated to building out its AI cloud infrastructure. This massive funding has, predictably, led to a sharp increase in interest expenses, which surged to $267 million in Q2, up from $67 million a year prior.
CEO and Co-Founder Michael Intrator emphasized that scaling capacity remains crucial for success in what he described as a “structurally undersupplied market.” He stated that CoreWeave is “aggressively expanding its footprint” in response to intensifying customer demand, aiming to achieve over 900 megawatts of active power by the end of the year. Intrator believes that AI applications are increasingly permeating all sectors of the economy, driving an aggressive demand for CoreWeave’s specialized cloud services.
Further accelerating its expansion, CoreWeave has proposed a $9 billion acquisition of Core Scientific, a bitcoin mining operator. Intrator asserted that this acquisition would enable CoreWeave to scale more rapidly and efficiently, providing approximately 1.3 gigawatts of gross power capacity across Core Scientific’s national data center footprint, with an additional gigawatt available for future expansion. The deal is also projected to eliminate over $10 billion in future lease liabilities. However, the proposed merger has faced resistance from some Core Scientific shareholders, who have expressed concerns about receiving CoreWeave shares in exchange, fearing a potential decline in their value.
CoreWeave’s operating margin also saw a significant contraction, shrinking to 2 percent from 20 percent a year ago, primarily attributed to $145 million in stock-based compensation costs. Looking ahead, the company anticipates Q3 revenues to range between $1.26 billion and $1.3 billion, with interest expenses projected to rise further to $350 million to $390 million. CoreWeave has raised its full-year 2025 revenue forecast to between $5.15 billion and $5.35 billion, a $250 million increase over previous guidance. Agrawal cautioned, however, that a substantial portion of the full year’s capital expenditure will materialize in Q4, aligning with the go-live dates for key infrastructure investments.
Despite the impressive revenue growth and ambitious expansion plans, concerns persist regarding the long-term sustainability of CoreWeave’s business model. A key vulnerability lies in its highly concentrated customer base. An SEC filing revealed that in 2024, a striking 77 percent of CoreWeave’s revenue originated from just two customers, with Microsoft alone accounting for 62 percent, and Nvidia believed to make up a significant portion of the remainder. While the company lists other prominent AI players like OpenAI, Mistral AI, and IBM on its website, this heavy reliance on a handful of tech giants exposes CoreWeave to the strategic shifts and spending decisions of its largest clients, presenting a considerable risk to its future stability.