Do you still remember the trigger for last year’s “AI meltdown”? Coreweave has made “significant progress,” and its stock price surged in response.

Do you still remember the trigger for last year’s “AI meltdown”? Coreweave has made “significant progress,” and its stock price surged in response.

```

CoreWeave, which previously triggered a trust crisis in the AI infrastructure industry due to a data center delay, announced a key breakthrough.

On Monday, according to The Information, internal company sources revealed that CoreWeave has achieved a major milestone in the delivery of its first batch of chips for the data center being built in Denton, Texas for its client OpenAI.

According to CoreWeave executives, the company has rapidly increased from “a few racks delivered” in mid-November last year to over 16,000 GPUs by the end of December. Leadership noted that on the busiest day, more than 2,000 GPUs were brought online.

This progress marks CoreWeave’s recovery from revenue setbacks caused by data center supplier delays in the fourth quarter of last year.Following the news, CoreWeave shares soared over 12%, and are up more than 20% year-to-date.

CoreWeave COO Sachin Jain, CTO Peter Salanki, and SVP of Engineering Chen Goldberg stated in a joint message to employees:

We completed this milestone under intense scrutiny. The past few months have tested us in ways that few companies experience. We faced setbacks from partners and uncontrollable factors.

The delay of the Denton project became a typical case of the growing phenomenon of "mutual blame" in the data center construction industry. As construction and deployment delays become increasingly common in the AI infrastructure sector, parties have begun shifting responsibility onto others.

Wallstreetcn mentioned that panic triggered by this incident not only caused CoreWeave’s stock price to plummet more than 60%, but also affected Broadcom and Oracle, both dropping more than 17% over three trading days.

Heavy rain delays data center delivery

This large AI data center cluster in Denton, Texas is planned to install about 260 megawatts of computing capacity, leased for OpenAI, but was delayed about 60 days last year due to heavy summer rainfall and strong winds that prevented contractors from pouring concrete on schedule.

The delay directly impacted CoreWeave’s business model— the company relies on high-interest debt to purchase thousands of advanced NVIDIA AI chips, installs them in server racks leased from third-party landlords, then subleases chip usage rights to AI companies.

On the November 10, 2023 earnings call, contradictory statements by CoreWeave management intensified investor panic.

CEO Michael Intrator initially said “it was just one data center” having issues, but was immediately corrected by CFO Nitin Agrawal, who clarified it was actually “one data center supplier” facing delays, implying a broader problem.

The next day, CoreWeave’s share price fell from $105.61 to $88.39, a drop of 16.3%, and continued to slide into December.

Despite recent delivery progress, CoreWeave still faces severe financial challenges.

D.A. Davidson analyst Gil Luria previously stated that CoreWeave has “the ugliest balance sheet in the tech industry so far.” The company’s latest quarterly revenue doubled year-over-year to nearly $1.4 billion, but it is still unprofitable, posting a loss of $110 million in the last quarter.

Risk warning and disclaimerThe market has risks, investment needs caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their particular situation. Investing accordingly is at your own risk.```