Coreweave CEO refutes "AI closed loop": All the big companies are investing heavily in infrastructure—where is the loop? It's all demand.

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CoreWeave, an AI cloud infrastructure provider, CEO Michael Intrator strongly refuted Wall Street's concerns over "circular investing" among tech giants, calling such claims "fundamentally flawed."

On October 9, according to CNBC, in an interview on Wednesday, CoreWeave CEO Michael Intrator said the tech industry is undergoing "fundamental infrastructure construction," and that the current partnership model is not uncommon in large-scale infrastructure projects in other markets.

He emphasized that global tech giants such as Meta, Microsoft, Amazon, and Google are making massive infrastructure purchases to serve their customers, and this is infrastructure construction driven by real demand. He believes that doubts about circular investing are only temporary, as the fundamental market driver is "huge."

The company recently signed major contracts with OpenAI, Meta, and Nvidia worth more than $43 billion in total, further cementing its position in the AI infrastructure market.

CoreWeave went public this March, becoming the largest tech IPO in the US since 2021, successfully raising $1.5 billion. With continued investor demand for AI and data centers, the company’s share price has soared more than 200% since its Wall Street debut.

Huge contracts trigger concerns over circular investing

A series of major contracts signed by CoreWeave recently has raised Wall Street concerns about "circular investing."

At the end of last month, the company announced it had expanded its cooperation agreement with OpenAI by $6.5 billion, bringing the total contract value with the ChatGPT maker to $22.4 billion. A few days later, CoreWeave signed a $14.2 billion deal with Meta.

In early September, CoreWeave also disclosed an order worth at least $6.3 billion with chip maker Nvidia. Nvidia is a major supporter of CoreWeave, and under the latest agreement, Nvidia is "obligated to purchase remaining unsold capacity" with the contract running through April 2032.

It is reported that these deals and other similar agreements among big tech companies have led some Wall Street analysts to worry that money is circulating among companies, creating an excessively circular investment model.

CEO strongly defends infrastructure construction driven by real demand

In response to the concerns, Intrator made it clear in an interview with CNBC host Jim Cramer:

"The reality is, truly large and important tech companies are purchasing infrastructure to deliver to customers — Meta, Microsoft, Amazon, Google. The world's largest tech companies are buying this infrastructure because they have demand, there's nothing circular about it."

He emphasized that the current deals represent "fundamental infrastructure construction". In such a large-scale infrastructure build-out, "seeing partnerships is not uncommon, as people are trying to provide infrastructure services to consumers," and this dynamic can be found in other markets as well.

Intrator said:

"The idea of circular investing — that's just the current narrative, but it will pass, because the underlying market driver is massive."

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