Microsoft Cuts Back on CoreWeave Services, FT Reports
**Microsoft Cuts Back on CoreWeave Services, FT Reports**
By Aaron Holmes
Source: Financial Times
Microsoft has cut some of its planned contracts with the data center startup CoreWeave due to delivery issues and missed deadlines, The Financial Times reported Thursday. The pullbacks raise questions about the durability of CoreWeave's business ahead of its planned initial public offering. Microsoft comprises 62% of CoreWeave's revenue, according to financial disclosures.
CoreWeave denied the report, saying in a statement that "there have been no contract cancellations or walking away from commitments."
Microsoft has been leasing data center servers from CoreWeave to help meet surging demand for AI services, including from OpenAI, which has relied on Microsoft for the bulk of its compute. That's because running such services requires specialized chips made by Nvidia that have been in short supply for the past year. Nvidia, which has invested in CoreWeave, allocated many of the chips to the data center startup last year, giving firms like Microsoft an incentive to do business with the startup amid the chip shortage.
More recently, OpenAI has inked data center deals with Oracle and other companies, meaning Microsoft won't have to shoulder as much of the startup's compute capacity. Microsoft is still planning to spend $80 billion on datacenters this year, the company said this month.