00:00How frustrating is it that you don't own your entire supply chain?
00:04How much of an issue is the sort of power you have to give to third parties?
00:09Oh, so look, I think it's important to understand that every single part of this
00:15ecosystem is dependent upon other parts of the ecosystem.
00:21Nobody controls the entire supply chain.
00:24And that's just the nature of doing business at this scale on projects that are as complicated
00:32as this, whether it's, you know, the design and architecture of the chips through the
00:40fabrication of the chips, through the building of the data center, through the concrete that
00:44has to go into the data center.
00:45Like, it's just, you know, like, it's really hard to even contemplate a world in which you
00:51have true control over every aspect of it.
00:54And so you're going to work with partners and you're going to work with good partners
00:58that are able to help you drive your business forward.
01:03Is this a good partner who's had issues at this PowerShell level?
01:06Yeah, look, they are a good partner, right?
01:08Like, we've been working with these guys since 2018.
01:11There has been a stumble.
01:14There's an issue.
01:15The issue is going to be cleaned up rapidly.
01:18But I wouldn't say that they're not a good partner.
01:21I think that, you know, we are, you know, we've gone back and contracted with them again
01:25and again.
01:26And, you know, they've contracted with us again and again because, you know, we do work
01:29well together.
01:30It's just, you know, occasionally you hit a bump in the road.
01:34You know, what we're talking about here is a contract that gets pushed back by, you know,
01:41one quarter, let's say.
01:43And the impact of that on our revenue is a delay of revenue, not a loss of revenue.
01:49And, you know, I think that is the definition of working with an ecosystem of good partners.
01:55Michael, good morning.
01:56Which customer was it, please, that was impacted by this delay?
02:00We don't speak to specific customers within the data centers.
02:04That's not how we look at it.
02:05But, you know, we really are working with the whole, you know, or a material part of the
02:13broader kind of ecosystem that consumes compute at this scale.
02:20So, you know, that's, you know, this is a large project.
02:22It's from a large counterpart.
02:26And, you know, like I said, you know, they understand the impact of this delay and that
02:31they are shifting with us the contract back to ensure that the total contract value that
02:37was being contemplated is going to be captured at this facility.
02:41I thought you might say that, but I wanted to offer you the opportunity to explain who the
02:46customer was anyway.
02:47I appreciate that.
02:48This is going to sound a little bit like I work in your internal audit team or in your
02:53risk team, but there is a bigger issue here of managing third-party risk as much as you
02:58can.
02:59So if your supply is tight today, what procedures are you putting in place for the event that
03:06your backlog doubles and supply is even tighter down the road?
03:10Listen, that is the question that we work on across our company continuously, right?
03:16And if you think about the messages that I was trying to communicate during the earnings
03:24crawl yesterday, I talked about the incredible impact of the effort that we've had to diversify
03:32our clients.
03:33We started the year with, you know, 85% of our revenue to a single client, and we are coming
03:39out of the year with our backlog, which has reached all-time highs, where no specific client
03:47is more than 35% of it, and that is down from 50% even last quarter.
03:52So you're seeing tremendous progress on the contracting side.
03:55On the supply side, when you're looking at the powered shells, the data center providers,
04:00you know, there is no single provider of data centers that represents in excess of 20% of
04:10our 2.9 gigawatts of power that we will be delivering to the market over the next 24 months.
04:18You know, so you're seeing a real focus by our company to diversify on both sides of the,
04:24you know, the ledger, the clients that we are delivering infrastructure to, as well as
04:33the suppliers that are delivering us the components that we need to be successful.
04:38What can be done?
04:39Because we hear about power issues.
04:41We hear about how much people maybe need government to help speed up contracts, supply chain headaches.
04:47What is it in this particular data center issue that won't be replicated down the road?
04:51How are you making sure, or is it just something we are going to see time and time again, do you think?
04:56So, look, the way that we are handling this is we are doing several discrete things to ensure
05:05that we are future-proofing ourselves against these type of delays, right?
05:11So we have our team that has been built out over the past year that builds and delivers data center.
05:19And so we have a self-built organization to be able to deliver our own data centers.
05:23For instance, Kenilworth in New Jersey or Lancaster in Pennsylvania, where we are building from the ground up.
05:31Those skill sets, being able to deploy those individuals with those talents down to the data centers
05:38as they are being constructed by third parties if they encounter problems where we can be useful, helpful,
05:47thinking through ways of solving and driving the process forward is really important to being able to mitigate these type of delays.
05:54We have massively diversified our data center providers, so we're not exposed to any specific data center provider in too large of a component.
06:10And then the third piece of it is it's important to understand that as we get larger, as our delivered power gets larger,
06:18the relative impact of a delay at any one given site becomes less and less meaningful and less and less impactful on our run rate.
06:31And that's really important.
06:32Like you're encountering scaling issues within a company that's encountering scaling issues within a supply chain.
06:41Both of those will get better.
06:43Time solves that.
06:44Scale solves that.
06:45We are currently seeing that time isn't particularly helping the share price as we speak.
06:50It's now down 14.3 percent, worst day since August.
06:52We are here with Michael and Trater across radio and TV.
06:55And I want to sort of ask whether you think more broadly the U.S. is stunted by the supply chain headache,
07:03or do you think there is something that can be done from a federal perspective here to ensure that you can build at the rate you want to build?
07:09You're not having these sorts of headaches.
07:11So we've been we and many others have been, you know, quite forceful in making the case that there is a role for government in helping us with some of the permitting issues,
07:27speed to which you can get our infrastructure and others can get their infrastructure attached to the grid.
07:34You know, all of those type of things where there's there's there's a great role for for for the government to help in that they are the they are the organization or government entity that is correctly positioned to help facilitate that.
07:49And I think that's a great role where where government can lean in and make an impact across the space problem.
07:57Michael, you have an agreement with NVIDIA that lots of people find very interesting, that down the road, if there is spare capacity, there's some flexibility for you to deploy it elsewhere.
08:07That's a simple summation of it.
08:09But I'm wondering how you're thinking about serving some of the smaller A.I. labs and casting that net even wider in your customer base, if indeed that capacity gets freed up down the line.
08:21Yeah, it's a it's a contract I'm actually incredibly excited about.
08:25Right.
08:25It's a contract that we did with NVIDIA where we will deliver them compute for the next six years.
08:31But in the contract is the capacity to interrupt the flow of compute to them, and that will allow us to repurpose that compute to new companies, startups, companies that have struggled to get access to the compute that they require to bring new companies, organizations, ideas into existence.
08:55And I think it's just an incredibly important component of how the infrastructure is so important to allowing the ecosystem itself of these startups, of these new companies, of these new ideas to become more resilient, to become more scaled.
09:13And it's just a great contract for us to be able to position ourselves.
09:16It also provides this wonderful on-ramp for us to be able to work with the new amazing companies that are coming into existence so that they integrate into our solution and get to make use of the best alternative that exists in the market as they're scaling their companies.
09:34Michael, to finish, to what extent is NVIDIA still the gold standard, NVIDIA's GPUs for your customer base?
09:40And what data are you tracking on demand for those kind of more inference-specific chips that are offered by others?
09:49So, look, we have always been client-led, right?
09:54Our clients come to market and tell us, hey, we would like you guys to help us build a cluster.
10:01We need it to be this size and this location and this type of network.
10:04And we work with them in a very kind of interactive way to ensure that the infrastructure that we're building is the best infrastructure for them, is fungible for us, like all of these type of requirements to make for successful delivery of infrastructure.
10:20Right now, the reality of the situation is the buy signals from our clients overwhelm our capacity to deliver infrastructure to the market.
10:34Matter of fact, they overwhelm the entire market's capacity to deliver infrastructure to the market.
10:39You have a systemic shortage of ability to deliver the GPUs, the computing infrastructure for the build-out of artificial intelligence.
10:50And we have never wavered from that position.
10:53We have been very, very clear that, you know, when we look at the demand signals coming into CoreWeave, the totality of that overwhelms the capacity of the market to deliver that.
11:02And we'll continue to do that for quite a while.
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