In the current scarcity of computing power, CoreWeave has become a real hot cake. Thanks to the support of NVIDIA, CoreWeave has almost no competitors in the high-performance AI computing field.
Author: Deep Tide TechFlow Cleaner
Originally, graphics cards can also be used as collateral for loans!
In early August, GPU-accelerated cloud service provider CoreWeave recently used its NVIDIA H100 as collateral to obtain a $2.3 billion debt financing, equivalent to 16.5 billion RMB.
The financing round was led by Magnetar Capital and Blackstone Group, with participation from BlackRock, PIMCO, Carlyle Group, Coatue, DigitalBridge, and others. Prior to this, CoreWeave had raised $421 million, with a valuation exceeding $2 billion.
This is a miraculous company. Originally a cryptocurrency mining company focused on Ethereum, it unexpectedly transformed and became a cloud computing service company relying on NVIDIA graphics cards. In 2023, it caught the AI boom and secured major clients such as Microsoft, propelling it into the unicorn ranks.
This article takes you through the growth history of CoreWeave!
Rooted in Mining
In 2016, out of interest and curiosity, the founding team of CoreWeave, consisting of three commodity traders, CEO Michael Intrator, Chief Strategy Officer Brannin McBee, and CTO Brian Venturo, purchased their first GPU. They plugged it in, placed it on a pool table overlooking the East River in downtown Manhattan, and mined the first block on the Ethereum network.
Soon, mining became both a hobby and a business.
With some small early investments from friends, CoreWeave's mining location transitioned from the pool table to a garage (data center) in New Jersey. Shortly after, they decided to start a business, and the predecessor of CoreWeave, Atlantic Crypto, was officially established.
As a mining company, their core production material was GPUs. During the crypto winter of 2018/2019, when many mining companies went bankrupt, they took the opportunity to continuously acquire graphics cards at low prices. Hundreds of cards turned into tens of thousands, and the data center expanded to seven locations.
During the crypto winter, they attempted to provide GPU cloud servers for other cryptocurrency miners. Subsequently, they discovered a "demand" from numerous GPU-accelerated enterprises seeking their computational power support. These enterprises shared a common pain point: traditional cloud service providers offered limited computational power options and monopolized prices, making it very difficult for large-scale business expansion.
Therefore, in 2019, CoreWeave ventured into a new business, providing its GPU cloud to other enterprise developers, such as for CG rendering, which was their main business in the early days.
According to CoreWeave's official website, their solutions, from servers to storage and networking, are 35 times faster and 80% cheaper than general public cloud services.
In 2021, CoreWeave completed a $50 million financing round. At that time, they also mined Ethereum using their clients' unused local computational power.
By 2023, with the rise of ChatGPT and the AI wave, CoreWeave truly entered its glorious moment.
In April, the company raised $221 million in Series B financing, and in May, it secured an additional $200 million in Series B extension financing, totaling $576.5 million in financing.
Embracing NVIDIA
According to disclosed financing information, NVIDIA participated in CoreWeave's Series B financing. Although the specific amount was not revealed, it conveyed a message: CoreWeave has a big brother (NVIDIA).
The big brother was also very generous to the little brother.
According to The Information, despite the severe shortage of NVIDIA H100, NVIDIA allocated a large number of new cards to CoreWeave, while restricting supply to Amazon and Google.
In September of last year, the company became NVIDIA's first elite-level cloud service provider (CSP), offering AI/computing/visualization services. CoreWeave also deployed NVIDIA InfiniBand and BlueField DPU in the cloud, with the former providing end-to-end high-performance networking for scientific computing, AI, and cloud data centers, and the latter primarily improving the efficiency of computational infrastructure in data centers.
In July, CoreWeave collaborated with NVIDIA to train the GPT-3 large model using H100-based cloud services, which took only 11 minutes. In comparison, OpenAI trained GPT-3 using 10,000 A100s for 14.8 days.
It is widely believed that the reason NVIDIA favors CoreWeave is because CoreWeave, unlike other cloud service providers, exclusively uses NVIDIA chips and has no intention of reducing its reliance on NVIDIA by developing its own chips like Google and other major companies. Therefore, NVIDIA is also happy to support them.
In the current scarcity of computing power, CoreWeave has truly become a hot commodity, thanks to NVIDIA's support. In the high-performance AI computing field, CoreWeave has almost no competitors.
In June of this year, to ensure sufficient computational power for ChatGPT in the future, Microsoft signed a multi-billion-dollar AI computational power agreement with CoreWeave.
Brannin McBee, co-founder and Chief Strategy Officer of CoreWeave, stated that CoreWeave's revenue was $30 million last year and is expected to reach $500 million this year. They have already signed contracts worth nearly $2 billion for next year.
In addition, CoreWeave plans to establish its position in industries such as life sciences, including drug development, protein folding simulation, molecule discovery, and genetic testing. During the 2020 pandemic, CoreWeave contributed the computational power of 6,000 GPU mining machines to Stanford University's coronavirus research program, assisting in the analysis of the virus and its treatment methods.
McBee said, "Entering the data center is the most amazing thing. I have been assembling computers since I was young, and being able to be involved in this business, which can build and expand computer equipment, providing powerful computational power to the coolest companies on this planet, is really an interesting thing."
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