OpenAI, the creator of the ChatGPT chatbot, has signed a five-year, $11.9 billion deal with cloud services provider CoreWeave. The New Jersey-based company will provide the capacity to train and run artificial intelligence (AI) models for the Sam Altman-led firm, which is competing with Elon Musk’s xAI startup, the Financial Times (FT) reported, citing people familiar with the deal.
According to the publication, OpenAI will also receive a $350 million stake in CoreWeave ahead of the company’s IPO in New York. According to the FT, Microsoft had previously abandoned a planned deal with CoreWeave due to problems at the cloud computing provider. The corporation’s decision was a blow to the company, which filed for an IPO in New York this month.
The deal with OpenAI will allow CoreWeave to solve a number of problems, and Altman’s firm will surpass Microsoft in operating expenses of the cloud services provider. CoreWeave, founded in 2017 as a cryptocurrency mining company, has pivoted to providing cloud services to tech companies to build and train AI models using Nvidia’s high-performance GPUs. The group has amassed more than 250,000 Nvidia AI GPUs, making it one of the chipmaker’s largest customers.
OpenAI, meanwhile, is looking to increase and diversify its existing computing power. Such infrastructure will be critical in the race to build cutting-edge AI models, Altman said.