CoreWeave Won't Change Its Bid for Core Scientific

Bloomberg

Watch CoreWeave Won't Change Its Bid for Core Scientific - Bloomberg on Dailymotion

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00:00I want to understand why you're broadening out in this way.

00:04Yeah, thank you very much for having me. It's exciting to be back. And yes, we've been quite

00:09active on the M&A front as we continue to build and broaden our offerings. Many of them are

00:18organic, things that we're building internally. And as you can see with the Model F AI deal,

00:24as you can see with the OpenPipe deal, as you can see with the Weights and Biases deal that we did

00:32earlier this year, there is a tremendous focus that we have on broadening out how we're going

00:39to be able to support our clients from the software side. Obviously, there's also the

00:44core scientific transaction that is in process. And once again, it is part of our vision of being

00:50able to offer a turnkey solution from the bricks all the way up through the infrastructure and

00:59through the software to be able to serve our customers in the best way possible.

01:03And is that because also it's more profitable? Michael, we're looking at reports at the moment

01:07about Oracle and ultimately how razor thin its profit margins are when you're thinking about

01:12renting out compute because of the cost of ultimately the GPUs coming from NVIDIA. How hard is it to make

01:17your bread and butter work from a real profit margin perspective?

01:21Yeah, look, you know, the profit margins we're able to garner with the infrastructure that we sell

01:28are significant. We're excited about it. We've really been able to drive our business in accordance

01:35with our objectives. We're scaling at an incredibly fast pace. And so with that, you get short-term

01:42distortions. But in terms of the business strategy and execution, I couldn't be happier.

01:47When you think about where the space is today and where the space is going to be over the next

01:54several years, the broadening out of our offering of software solutions really allows for an incredibly

02:02effective way of bringing on new clients that are going to pay for not only the infrastructure,

02:09but also the services that they get when they need to be able to integrate artificial intelligence

02:15into their broader mission. And so we're excited about that. We think it's the right way to go.

02:20We've been aggressively pursuing it. We brought on some great teams. And, you know, you'll be seeing

02:26products coming out of those teams imminently.

02:29Michael, the top story today is Dell roughly doubling its growth projections for both sales and

02:35profit through fiscal 2030, largely because of AI server demand. And you are one of the key customers

02:42for Dell in that respect. From the customer's perspective, what does that kind of bigger

02:47picture forecast from Dell signal to you?

02:51Look, you know, there's a lot of noise in the space again, and this happens periodically.

02:57And, you know, but when you take a step back, you're seeing incredibly strong demand

03:02from Dell. You're seeing incredibly strong demand across the hyperscalers as they're able to embed AI

03:11into their products. You know, the profits that those are driving are the underpinnings. You were

03:17asking about what people look to. That's what they look to, right? Like they look to people that are

03:21able to generate revenue from their existing client base using AI. And that is incredibly strong.

03:26We've seen it repeatedly. You're seeing it again with Dell. It's really exciting. And once again,

03:31you zoom out just a bit here, and it's really an incredible space going through an incredible

03:38transition. That transition is causing a systemic imbalance in the infrastructure side, which is

03:45what drove us towards the deal that we are looking at with Core Scientific. Core Scientific is an

03:56infrastructure provider for us. They are one of many. You know, over the, since our last earnings call, we've

04:03increased our contracted pipeline of power from 2.2 gigawatts to now up to 2.8 gigawatts, which is a new number

04:12that we're putting out there, of which none of that comes from Core Scientific. We have broadened our strategic

04:19relationships with other private providers of the infrastructure. A great example of that is Galaxy

04:24Digital, you know, where we're able to go ahead and get large blocks of continuous power to continue to buy

04:32infrastructure that will be made available to our clients as they continue to build.

04:38And ultimately, that brings us back to this particular acquisition that we're looking at.

04:45You know, it's an acquisition that we put out there several months ago. Core Scientific provides

04:49Core Weave with over 500 megawatts worth of infrastructure, which we currently have contracted.

04:56Therefore, you know, we have a great relationship with them. Regardless of the outcome of this

05:01acquisition, we will continue to have a great relationship with them as they deliver power to us within our data

05:07centers that we share with them. It is a small and shrinking part of our portfolio.

05:13And ultimately, that led us to, you know, the position where, you know, really under no circumstances will we

05:21readdress the bid that we put out. That's the number. We think it fairly represents the value for them. We think it will

05:27be great for the two companies to move forward together. The systemic imbalance within the infrastructure is

05:35causing, you know, it really is stressing the supply chains and causing all kinds of delays.

05:41Yeah.

05:42I'm sorry to cut you off. We're going to run short of time. And I've got to ask you this. 24 hours ago,

05:47we had AMD's CEO, Lisa Su, and OpenAI President Greg Brockman on the program. There are lots of unanswered

05:54questions about the six gigawatts of capacity they've agreed. Will Core Weave participate and support in that

06:01arrangement just very briefly? Yeah. So we support OpenAI enormously across the space. And we have great

06:08relationships with AMD. We use their infrastructure within our portfolio. How they choose to divvy that

06:13out, we don't know yet. You know, we're more focused on the 14, you know, the minimum deal that we did two

06:20weeks ago, which was a minimum of $14.2 billion, which will continue to expand with meta. That will come online in

06:282026. We're really excited about that. And, you know, the AMD deal with OpenAI is just another example of

06:37the recognition across the space of how much of this infrastructure is required and how much demand all of

06:44these providers of artificial intelligence are encountering.

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