In a move to meet the surging demand for AI-powered services, Microsoft has reportedly agreed to spend potentially billions of dollars over multiple years on cloud computing infrastructure. According to sources familiar with the matter, Microsoft’s investment is aimed at startup CoreWeave, which recently raised $200 million in financing.

CoreWeave, known for its simplified access to Nvidia’s graphics processing units (GPUs), offers high-quality GPUs that are considered the best on the market for running AI models. Microsoft’s decision to invest in CoreWeave stems from its commitment to ensuring that OpenAI, the company operating the viral ChatGPT chatbot, has adequate computing power. OpenAI heavily relies on Microsoft’s Azure cloud infrastructure to meet its compute needs.

While Microsoft and CoreWeave have declined to comment on the deal, the demand for infrastructure capable of supporting AI models has driven Microsoft to seek additional ways to tap into Nvidia’s GPUs. CoreWeave CEO Michael Intrator revealed that the company’s revenue has significantly increased from 2022 to 2023, indicating the rising demand for their services.

Nvidia, whose stock price has soared 170% this year, projects its growth to be driven by data centers due to the increased demand for generative AI and large language models. Colette Kress, Nvidia’s finance chief, mentioned CoreWeave specifically during an earnings call, acknowledging their role in supporting OpenAI’s GPT-4 large language model.

CoreWeave’s website boasts cost-effective computing power that is 80% less expensive than legacy cloud providers. The company offers Nvidia’s A100 GPUs, which are also available through Amazon, Google, and Microsoft clouds. Additionally, CoreWeave provides less expensive Nvidia A40 GPUs for visual computing, while the A100 GPUs target AI, data analytics, and high-performance computing.

Some CoreWeave clients have encountered difficulties obtaining sufficient GPU power on major clouds, leading them to request A100 or newer H100 GPUs from Nvidia. However, CoreWeave has recommended the use of A40 GPUs, which are cost-effective and capable of delivering excellent performance.

The news of Microsoft’s investment in CoreWeave comes on the heels of reports that Microsoft has engaged in discussions with Oracle regarding server rentals to accommodate additional capacity. This move reflects Microsoft’s continuous efforts to meet the growing demand for AI-powered services and infrastructure.

As the AI boom continues to accelerate, major players like Microsoft are actively investing in innovative startups like CoreWeave to ensure they can provide the necessary computing power to support AI models and services. With these strategic investments, Microsoft aims to solidify its position at the forefront of the artificial intelligence revolution.


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