CoreWeave CRWV has announced it will power a cloud deal between Alphabet’s Google GOOGL and ChatGPT-maker OpenAI. According to Reuters, CoreWeave will provide computing capacity to Google, which will then sell it to OpenAI to address the growing demand for AI services like ChatGPT. Additionally, Google will offer some of its own computing resources to OpenAI.
The massive demand for computing power is driving deals between cloud service providers and hyperscalers, including CoreWeave. The company has seen its stock price rally 191% over the past month due to AI tailwinds. CoreWeave secured a five-year contract worth $11.9 billion with OpenAI to provide computing capacity, and the two companies have expanded their collaboration to meet growing demand.
The partnership is expected to boost CoreWeave’s prospects while diversifying its revenues and addressing concerns about revenue concentration. However, some analysts are concerned about the stock’s lofty valuation. Despite this, Wall Street has a Moderate Buy consensus rating on CoreWeave stock, with an average price target of $47.42 and a downside risk of 68.3%.
Source: https://www.tipranks.com/news/coreweave-crwv-to-power-google-openai-deal-with-computing-capacity