CoreWeave CEO Michael Intrator discusses the company's data-center delay, plans to diversify its suppliers and working with ...
Questions asked in this interview
7
0:05How much of an issue is the sort of power you have to give to third parties?
1:27Is this a good partner who has had issues at this power shell level?
2:19Which customer was it that was impacted by this delay?
3:06So if your supply is tight today, what procedures are you putting in place for the event that your backlog doubles and supply is even tighter down the road?
5:02How are you making sure, or is it just something we are going to see time and time again do you think?
7:10... broadly the US is stunted by the supply chain headache or do you think there is something that can be done from a federal perspective here to ensure that you can build at the rate you want to build and not have these sorts of headaches?
9:58Michael to finish, to what extent is Nvidia still the gold standard, Nvidia's GPUs for your customer base, and what data are you tracking on demand for those kind of more inference specific chips that are offered by others?
Let's talk about where we are in this cycle because CoreWeave shares, as Ed pointed out earlier, under pressure. That's after it lowered its annual revenue forecast due to a delay at a third party developing a data center. Really overshadowed impressive growth in revenue and order backlog. Let's get straight to it with CoreWeave CEO Michael Intrator. How frustrating is it that you don't own your entire supply chain? How much of an issue is the sort of power you have to give to third parties?
Oh, so look, I think it's important to understand that every single part of this ecosystem is dependent upon other parts of the ecosystem. Nobody controls the entire supply chain. And that's just the nature of doing business at this scale on projects that are as complicated as this, whether it's the design and architecture of the chips, through the fabrication of the chips, through the building of the data center, through the concrete that has to go into the data center. It's really hard to even contemplate a world in which you have true control over every aspect of it. So you're going to work with partners, and you're going to work with good partners that are able to help you drive your business forward.
Yeah, look, they are a good partner. We've been working with these guys since 2018. There has been a stumble, there's an issue. The issue is going to be cleaned up rapidly. But I wouldn't say that they're not a good partner. We've gone back and contracted with them again and again, and they've contracted with us again and again because we do work well together. It's just occasionally you hit a bump in the road. What we're talking about here is a contract that gets pushed back by one quarter let's say, and the impact of that on our revenue is a delay of revenue, not a loss of revenue. And I think that is the definition of working with an ecosystem of good partners.
We don't speak to specific customers within the data centers. That's not how we look at it. But we are working with the whole or a material part of the broader ecosystem that consumes compute at this scale. So this is a large project from a large counterpart. And they understand the impact of this delay, and they are shifting with us the contract back to ensure that the total contract value that was being contemplated is going to be captured.
I thought you might say that, but I wanted to offer you the opportunity to explain who the customer was anyway. I appreciate this is going to sound a little bit like I work in your internal audit team or in your risk team, but there is a bigger issue here of managing third party risk as much as you can. So if your supply is tight today, what procedures are you putting in place for the event that your backlog doubles and supply is even tighter down the road?
Yeah, listen, that is the question that we work on across our company continuously. If you think about the messages that I was trying to communicate during the earnings call yesterday, I talked about the incredible impact of the effort that we have had to diversify our clients. We started the year with 85% of our revenue to a single client, and we are coming out of the year with our backlog, which has reached all-time highs, where no specific client is more than 35% of it, and that is down from 50% even last quarter. So you're seeing tremendous progress on the contracting side. On the supply side, when you're looking at the power shells, the data center providers, there is no single provider of data centers that represents in excess of 20% of our 2.9 gigawatts of power that we will be delivering to the market over the next 24 months. So you're seeing a real focus by our company to diversify on both sides of the ledger, the clients that we are delivering infrastructure to, as well as the suppliers that are delivering us the components that we need to be successful.
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