CoreWeave turns to customer prepayments, shorter contracts to fund AI growth

CoreWeave reported third-quarter revenue of $3.66 billion, up 168% year over year, but posted a $709 million net loss and $846 million in quarterly interest expense. CEO Michael Intrator said the company will not use unsecured debt at current yields, instead relying on loans backed by specific customer contracts and drawing funds as needed to finance infrastructure for its $132.5 billion backlog. CoreWeave expects about $9 billion in customer prepayments and deposits over the next three months, including more than $3 billion tied to new contracts for already-built capacity. The company has also raised prices about 25% in July and another 10% later in the quarter, and is allocating more capacity to short-term deals priced above $40 million per megawatt annually, versus $20 million to $25 million for four- and five-year contracts. In August, CoreWeave closed a $2.6 billion loan designed for shorter-term customer contracts. While the strategy could boost profits and reduce reliance on unsecured debt, it carries greater risk around contract renewals and pricing, and bond investors have shown concern, with some yields exceeding 15% last month. The approach underscores how dependent the AI infrastructure boom is on sustained demand.

(Source：TechCrunch)