Microsoft Walks Away From Some Of Their Commitments With CoreWeave Ahead of $35B IPO
Microsoft has backed out of some of their agreements with cloud computing provider CoreWeave, dealing a major blow to the company's plans for a blockbuster initial public offering (IPO). CoreWeave, which supplies data center infrastructure for AI workloads, filed for an IPO this week, aiming to raise $4 billion at a valuation exceeding $35 billion. However, its heavy reliance on Microsoft—its biggest customer, contributing 62% of its revenue last year—has raised concerns about future stability.
CoreWeave, originally founded as a cryptocurrency mining firm before pivoting to AI cloud services, has rapidly expanded in recent years, accumulating substantial revenue but also significant debt. The company’s dependency on Nvidia, which supplies all of its AI chips and also holds a stake in the company, presents additional risks for the business. CoreWeave acknowledged in its IPO filings that any negative shifts in its relationship with Microsoft could “adversely affect our business, operating results, financial condition, and future prospects.”
While Microsoft still maintains multiple contracts with CoreWeave, the tech giant’s decision to walk away from certain agreements reflects doubts about the provider's ability to meet expectations. Sources familiar with the matter cited “delivery issues and missed deadlines” as key reasons for the move. Despite this, Microsoft has agreed to spend over $10 billion on CoreWeave services through 2030, and the company remains a significant partner.
Industry analysts suggest Microsoft’s decision is not linked to broader changes in its data center strategy but rather to specific performance concerns with CoreWeave. Microsoft CEO Satya Nadella recently noted an “overbuild” of AI infrastructure, indicating that the company may be reassessing its cloud partnerships. Meanwhile, CoreWeave is pushing forward, announcing this week its acquisition of AI developer platform Weights & Biases to strengthen its cloud offerings.
The uncertainty surrounding CoreWeave’s relationship with Microsoft casts a shadow over its upcoming IPO. While the company has seen rapid growth, its reliance on a few major players—Microsoft and Nvidia—could make investors wary. With its IPO expected to be one of the largest for a tech firm this year, CoreWeave must prove it can maintain confidence despite Microsoft pulling back.
