Hello everyone and welcome to At Barron's. I'm Andy Serwer and welcome to our guest Michael Intrator, CEO of CoreWeave. Mike, great to see you. Thanks so much for joining us.
So CoreWeave is right up there with Nvidia and the Mag 7, one of the most consequential companies on the planet right now. So there's a lot to talk about. I guess I'd like to start by asking you, Mike, to explain CoreWeave's business model. How does it work?
That was an aggressive placement of CoreWeave. We're an important part of the ecosystem for sure, but you know, those are some of the largest companies. Being modest.
CoreWeave's role in the ecosystem, right? The way that we built the company, the way we conceived of the company was from a position of trying to pull together the best silicon solution, the best software solution, and the best infrastructure solution and deliver that to the market so that consumers of the accelerated compute would have the best experience as they build product, as they serve inference for their clients. All of those things really come from the integration of NVIDIA's silicon solution, our software solution, and our ability to build and deliver the infrastructure at scale, which is an incredibly important component of the debate, right? Because you are required to be able to participate in the market at scale or else you truly don't matter. Anybody can run a GPU, but can you run a supercomputer that has the capability of training one of the bleeding-edge foundation models? And that's the part of the space that CoreWeave tries to live in, right? Serving inference at scale so that companies that have built wonderful products are able to sell them broadly and effectively.
Okay, so maybe for a 60-something fairly ignorant journalist to break that down a little bit more: your customers are the ones that are making LLMs, developing those large language models, right? Creating AI and they need NVIDIA chips and a tremendous amount of computing power and you guys have the chips and then software layered on top of that. So instead of just buying the chips and building these whole systems which are software and chips together, they can just go to CoreWeave for a solution. Is that accurate?
Yeah. Yes. Pretty good for 60.
Okay, then you got to do it. Thank you.
Look, you know, running this infrastructure is very difficult, right? It is very challenging. It breaks. Things need to be restarted. And the way that we have been able to build the company, the way that we've been able to kind of disrupt what had been a very, very static business. The cloud business really was dominated by obviously three hyperscalers and it was extraordinarily difficult for the past 20 years to make a real attempt to dislodge or to provide an alternative service that could participate in the cloud at scale. And you know, it was the confluence of accelerated computing, right? So the real, the birth of these incredible GPUs that allow for a certain type of computational acceleration, a new technology, right? And all of this is intertwined, right? And that's artificial intelligence and the birth of a new way of using the cloud. All three of those things came together and allowed us to fill a void, which allowed us to build the company that we've been running for, you know, since 2017. And you know, it has been a combination of the different pieces of the business that's allowed us to kind of accelerate into this space the way we have.
Right. Can you give an example maybe using one of your customers, your big customers and for instance, are you running physical data centers or give us some more color if you can, Mike?
Maybe a good way to do this is let me tell you how I think about the business, how I construct the business in my mind and how I try to figure out how to build and accelerate and continue the growth trajectory we're on. And the way that we did this, probably a better way of saying it, is there are three kind of macro components that had to come together, right? The first one is that we had to build a technological solution to a problem, right? It is a beautiful solution and the problem was parallelized computing. The way that artificial intelligence, CGI rendering, batch computing, medical research will be done going forward is through something called parallelized computing and that is different than the way that cloud 1.0 came into existence. That was sequential computing, right? And that means basically you solve one problem, move to the next problem, move to the next problem. But parallelized computing requires you to solve simultaneously across a massive band of compute and step and solve and solve. And the GPU allowed that to happen. And our approach to the cloud was, okay, this is a fundamental change. This is a totally new way of consuming compute. What are the building blocks that need to be brought to bear in order to be able to do that effectively? And that was the technical solution that is represented by the software layer that CoreWeave has produced that is the best solution for solving for that type of cloud in the world. And you know, it's an incredible solution. We are years ahead of everybody else in kind of configuring it. And our clients absolutely love to use our solution because it is so much more effective than other solutions that are out there, right? And so that's the first piece is you have a technical problem you got to solve.
The second piece of the problem is you're building compute, you're building the cloud at a size and scale that defied the imagination until we were here, right? It is so massive the buildout that's going on. It is a planetary-scale computing buildout to be able to support artificial intelligence today and into the future. And you know, for people who come from the energy world this is like the base load buildout. This is going to be the engine that allows us to continue to scale solutions and artificial intelligence. And that's the second piece, right? It's a physical business and that has been one of the components that's really hard for, let's say, tech investors in particular who have historically invested in capital-light businesses to understand. Like this is a capital-heavy business and you know, that has become increasingly obvious to everybody as you see the hyperscalers come in with, you know, repeatedly increasing the capital budgets that they're going to allocate to building this infrastructure. And then the third piece of the business that was a necessary component was to understand the magnitude of capital that was required to build this infrastructure. And you know, when I think about our business, you cannot do and you cannot build this type of cloud without having each of those three components working in synchronization in order to drive the company forward.
I especially want to talk about the financing part. And as people may be surprised, believe it or not, Mike is not a technical person. He's a Wall Street person basically, which is very unusual obviously for a tech company. But just again to go back a little bit to what you do and then we can move on a little bit more. So are there CoreWeave data centers?
How many do you have and where are they for instance?
So we have, when we look at the data center space, we have self-built data centers and we co-locate an enormous amount of our infrastructure in third-party providers. And so that's a host of different public and private companies that provide infrastructure to us.
What would be some examples? Can you give us some examples?
Equinix, Switch, Digital Bridge has a bunch of companies, like the who's who within the data center space. And you know, when I started this business, I didn't really intend to go into the data center business. I felt like that was more of a real estate portion of the business. And it was hard enough to walk into investors and say, 'Hey, I got this great idea. I'm going to get a bunch of folks together that I really, really want to start a company with, and we're going to tackle one of the largest, most capital-intensive static industries that exist, which is the cloud.' And then you have to tell that to a real estate guy and they laugh, right? So what we really wanted to do is we wanted to piggyback off of the great providers in the space that provide physical infrastructure. However, as the energy markets have tightened, as the buildout has progressed at the pace and scale that it has, getting more control over the bricks and mortar at the data center level has become a strategic imperative for the company. And so while we will continue to use our third-party partners to help us accelerate and diversify our locations and build infrastructure as fast as possible, we will also be doing CoreWeave data centers and it will be a combination of both as we move forward.
Right. And are they all in the US at this point?
No. No. We have data centers across the US and Canada. We have data centers across Western Europe up into the Nordics. And we continue to build and scale the company as we try to establish our global footprint to be able to serve our clients. And one of the things that's been a mantra for me has been to allow our clients to lead us, right? They tell us where they need infrastructure. They tell us the type of infrastructure they need or want in order to serve their clients and serve their business needs. And so, you know, we are being pulled increasingly around the world by our clients who love our solution and want it to be in more and more regions to be able to support the workloads that they have.
So, is it dozens or scores or how many?
Oh, no. We have like, I'm trying to remember the number that we used at the last earnings. I think it's like 40...
42 says someone from the audience who knows what they're talking about.
Yeah. Okay. Yeah. We got dozens, right? Okay. You got dozens. Come on. Soon you'll have scores. I think scores. Well, you could say scores. You say scores now, but you kind of need more than 60 to really do a score.
