YouSaid · the spoken record

CoreWeave

lines on the record: 35
first: 2025-11-13
most recent: 2025-11-13
sittings or episodes: 1
sources: podcast

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“Really curious about these chip loans and how quickly these chips degrade because that matters not just for those loans but for every single company that is building out these data centers because using them heavily really choose them up, that means that there's going to be a bigger spend than everybody is already projecting. So to me that is a really crucial piece of it. And then the other piece of it that I've been thinking about a lot are obviously the special purpose vehicles and the debt. Those two things I would like to understand them better. These special purpose vehicles that are popping up here and there and everywhere to handle debt, to handle transactions and maybe de-risk them for some of these companies. I wonder what that means on a broader scale and how and if that is something that we can keep an eye on because one of the other things that's true here is that those special purpose vehicles are just harder to keep”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Turning around and using that to secure a loan, leveraging up and then buying more NVIDIA chips. And for NVIDIA, this is actually a pretty great arrangement, not just because somebody's buying a bunch of their chips, but also because it gives them leverage over their biggest customers. Like if you think about your Microsoft's and your Amazon's, they've been talking about creating their own chips to help lower their costs that they would then preferentially use in their data centers. So not only are you creating more competition for your own ships, you know, jacking up the price, you're also effectively creating a market where your chips are the default. So if Microsoft has its own chip, but everything is meant to run on an NVIDIA chip, that chip is not going to be as useful. So that's part of what I see here. It also gives you more leverage when you go into a negotiation with Microsoft because”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“As a lady of a certain age, the first time I ever heard of a special purpose vehicle was Enrum. For those of you who are maybe less familiar with the Enron scandal, there were a bunch of things that Enron did that were fraud. One of them was they created special purpose vehicles and used them to hide their debt. The thing about fraud is that the part that's illegal is the lying. It may not actually be illegal to create a special purpose vehicle and load it up with debt. As long as you tell everybody that's what you're doing. Looking at Coraeave and the other neoclouds and sort of unfocusing my eyes a little, I kind of wondered if one might think of them as an exercise, as being essentially like special purpose vehicles for NVIDIA. Obviously, they have other investors. But NVIDIA is putting an amount of money in that company, we know more about CoreWeave because it's public, but it's not just CoreWeave.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“We can use the chips to, I don't know, be more AWS. They might be overpowered for that, but it's fine. We'll just stop our CapEx for a couple years and eat it. They can do that. Meta has an advertising business. Google has an advertising business. All of these companies that are much larger than Coreweave that are participating in this buildout are in some ways insulated from the risks of overbuilding. Because if they overbuild, they have other businesses that can just stick in those data centers and sooner or later they'll be fine. It does not have another business. So if the data center buildout is big enough for demand, that's a problem for Coreweave.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“I think one of the big ones is demand. Right now, most of the demand for compute comes from training models and not necessarily from inference or people using the models. If the demand for inference doesn't tick up quickly, that becomes an issue. Also, let's say we have another deep-seek moment where there's a relatively light model that doesn't demand a lot of compute that is really powerful. That changes things, right? It's really difficult to figure out what demand is going to look like next year, let alone five years into the future or however long you need to know in order to justify these data center buildouts. And if you are a big company, like let's say Amazon, one of the things you can do is you can say, look, we're betting part of the company on this. We're going to build out these data centers. And if this AI bet doesn't work out the way we want, it turns out we have other parts of the business.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Sam Altman himself has repeatedly said he thinks AI is a bubble. So if you're confused about whether it's a bubble, I think you can point to the guy who's the tip of the spear that might pop this bubble. And he's saying, this is a bubble. And there's some part of that where the question is maybe not when the bubble pops, but how, because then you can look for the markers that it might be going. What are the markers that you see?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“I think that's probably what Nvidia argues it's doing and propping up these neoclouds like Coreweave, is that they are investing in the AI space because they want to create an ecosystem that will then sustain itself and buy NVIDIA chips. In the case of NVIDIA in particular, they have a lot of money, a lot of cash on hand. And when that happens, you can do things like you can do share buybacks, you can increase your dividend, but at some point you have to put the money somewhere. Ideally, somewhere where there's going to be interest where you're going to make more money on your”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Financing is one way of looking at it. Another way of looking at it is maybe more cynically you're passing around the same $5, like when you and your friends go out to eat. And, you know, if you think about open AI's arrangements with Coreweave, they have, I think, a $22 billion contract at this point. And Coreweave has given OpenAI $350 million of company stock. That is circular. There's some amount of money that is just going the whole way around. These are not the only deals where you're seeing this. I'm picking on OpenAI because they are the most, I think, important company in this space for a lot of people. And that's where a lot of this reporting has focused is on open AI specifically. But they're not the only ones who are doing it. And so this is something that has also become something of a concern for investors. It's like, wait a minute, what's going on with the money here?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“One way of understanding circular financing is that essentially a company, let's call it OpenAI, is receiving billions of dollars from a company before sending that money back to pay for computing or other services. If we're thinking about open AI and Microsoft, Microsoft has invested in OpenAI. They have a partnership. And OpenAI is using Microsoft servers. And I assume paying for them. So that has made investors really nervous. And sort of a lot of the focus here has been on open AI specifically, where Microsoft sends a certain amount of funding and then OpenAI sends back a certain amount of revenue. And I think that figure is $13 billion in both directions, which is a clever way of”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“And this widget business may not have 1% of its income that it can invest in AI right away. So it's going to continue using legacy products until either it can't or it has an especially good year. And that is going to slow the adoption. If we look at sort of the ways that AI is being adopted right now, the people who are taking it on first are the people who have these relatively sophisticated businesses. So we're talking about banks, we're talking about software companies. If you think about the physical world, that's not happening at quite the same rate.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“When people were saying in 1999 that you're going to be shopping online, they weren't wrong. Like pets.com was actually not a bad idea. It was just early. The timing was wrong, right? Because if you look at Chewy, what is it? It is basically a much later pets.com and it was enormously successful. So, you know, you think about like how people work around new technology and the ways that businesses work around new technology. And you think, well, maybe there's going to be a slower adoption. So let's take, for instance, a normal business that sells physical objects. We'll say widgets because why not?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Is why the debt is important because the chip loans are only one kind of debt that Corweave has taken out. There's a revolving credit line with JPMorgan. There's some vendor financing involved, there are secured loans with investors. All of these types of lending have different structures. Depending on when the loans come due and how this is structured, that's going to affect CoreWeave's timeline from when they have to have the money. Maybe as long as they have access to credit markets, they can extend that sum, right? Like they can take out a loan to pay off the interest on the other loan and give themselves a little more runway. But eventually you start to look at the company and you think given the size of these loans, we really need to have a very fast takeoff for AI that is built into the assumptions here. And so if you imagine AI is a normal technology, like an important technology, but a normal one, that takeoff isn't going to happen that way. I would like you to think about like”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Corey have a path to being profitable inside of all this, like, even if AI doesn't pay off, right? And OpenAI never makes a dollar, they're still going to pay Coreweave for capacity. Is there a path for Coreweave to say, look, we just had the infrastructure on some timeline, we're going to figure this out. We can just ride the wave and make money along the way.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“And we have vehicles that get loans all the time and trucks depreciate. We have a pretty good schedule for the depreciation of the truck for your business. And so you can get a loan with the truck as collateral, and that's not really an issue. But because this particular kind of financial product is so new, it's sort of difficult to figure out what's going on with the chips. To me, that is one of the central questions here about will this succeed? How good are the chips? How long did they last? I want to be clear, it's not just Coreweave that's doing this. They pioneered this kind of loan. They were the ones who did it first. And that's because their CEO and a couple of other folks in their senior management, they don't come from tech. They're finance guys. They came up with this interesting financial product, which I personally am fascinated by. Then a bunch of other similar neo-cloud companies immediately followed in their footsteps. So that's like Lambda, Crusot,”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“This is the thing that I'm really curious about, and obviously drop me a line if you know, because the chip depreciation cycle really matters here, and there seems to be a fair amount of disagreement about what it actually is. For those of you who follow Michael Burry, who you may recall from the Big Short as the guy who nailed the timing on the financial crisis, he's arguing that the depreciation schedules that we're looking at right now are in fact too rosy. That may be true. I barely scratched the surface here, but the thing that I have found is that a lot of things vary, right? So we're the location of the chips are, what kind of infrastructures around them, how they're being serviced, all of these other things, how heavy the uses. There seems like there are a lot of variables involved in how quickly these chips wear out. And so that, to me, is one of the central questions about whether this works out or not, is this good collateral? There's one way of looking at this where these chips are effectively the same as a truck.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“The payoff of those loans is that the chips will do extraordinarily valuable workloads, but the chips wear out, and AI as an industry is not yet proven that it can do a bunch of really, really valuable workloads. There's a chronology problem here that suggests to me that AI won't pay off before all of the NVIDIA chips literally wear out, that OpenAI will just do unprofitable Sora video generation at such rate that the chips will wear out before someone invents an AI workload that doubles the profits of Citibank or something. Like, I don't see how those timelines actually align such that this business can succeed. Is there a better thesis out there than that?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“So, the chips piece of this is the other thing that just constantly breaks my brain. Whenever I talk to you about it or I read anything about it, Corey was taking on tons of debt, is taking tons of loans, it's collateralizing those loans with a chips it's bought from NVIDIA.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“My impulses, no, but I mean, we're gonna find out. Like, you know, I could be wrong. It wouldn't be the first time I've been wrong. But I look at Coreweave and I see how much debt they've taken on, and it really makes me nervous. Know there's been sort of this ongoing theme, I would say, in the last couple of months where we've seen a lot of debt being taken out in the markets for this AI buildout. There's good reason why you would use debt rather than profits, mainly that you get a bunch of money really quick, and that lets you do the build out really quick and then potentially that matters for the lifetime of the chips. Because if you do the build out really quick, then you get the maximum lifetime out of these chips. And maybe you make your profits faster. Like that's the hope, right?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Understand why it's profitable to be the sort of middleman operator between your pristine credit rating and like the muck of growing a business. There's a lot of money in that middle zone traditionally across every industry and every category you can think of. But Corey was a public company. Can you sustain a public company on we will accept your risk and hopefully AI pays off?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“He's not wrong. It is really nice to have a good credit rating because it means you can borrow at a lower rate. But I also wonder how much of this is because these special purpose vehicles aren't subject to the same kinds of regulations as parent companies and have certain kinds of structures that may be advantageous.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Might be. One of the things that I've been thinking about here a lot are these special purpose vehicles. There are a lot of reasons why you might choose to use one as a company. One of them might be to limit risk, the risk that something goes bankrupt or the risk that something might be affected by another part of the company. Because these are little contained fiefdoms, that lets you feel a certain amount of comfort with what you're doing in a way that I think that a lot of these companies are embracing. And as a longtime reader and admirer of Matt Levine, he had written a thing about how these companies are maintaining their pristine credit ratings, like Microsoft's is better than the US, I think. They're doing it via the SPVs. They're doing it via some of these deals where they're taking on debt without touching their credit ratings. And he has suggested that this is because they think it's just really nice to have a good credit rating.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“We've seen this idea pop up in other places. Meta just did what's called a special purpose vehicle to build some data centers of its own. Companies that are situated much like Coreweave that actually NVIDIA is investing in as well. Is this just the answer to the risk of we're going to build a data center? The cost might balloon and we don't know what the return is. Is it just there's a problem and this is the obvious solution?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Doing another big spend. That is also something of a risk, right? Being in this business, there are these assets that depreciate. CoreWeave is taking on those risks. Microsoft is just renting. It doesn't have to worry about, is this data center going to be something that I need to continue to operate forever? Are these chips going to be outdated next year? None of that matters. It's just, oh, this is a place where I can put excess business.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“It's taking on some of the risk of building data centers. That is an undertaking. Construction projects, as I think everybody knows, often don't happen on schedule for reasons that have nothing to do with how good people are at building things. Sometimes if the weather sucks, you just can't build. That's just a thing that happens. There is inherently risk in building stuff. On top of that, if you think about chips, they frequently and very quickly become outdated. And so if you are doing a big spend on this generation”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“One of the reasons why you have been getting the occasional DM for me where I just say I feel crazy because I look at this stuff and I feel crazy. I think one way to understand this is that NVIDIA really wants Coroeve to exist. And so they're going to do what they need to do in order to make that happen. There's a reason for that. Part of it is the data center build out and the fear that one might overbuild. And part of it is that one of Coreweave's big customers who've just signed a huge contract with them and then expanded it is OpenAI. And OpenAI, as far as I know, is not profitable and hasn't been profitable and has been losing a lot of money. So if you are a certain kind of person or bank, you might be nervous that a major customer open AI doesn't have profit and may not be able to pay its bills. And so what this guarantee from NVIDIA does is”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Well, they are is the thing. And this is part of what makes Corweave interesting, right? Because a lot of their customers Way in which Microsoft is basically getting to have this compute without having to take on some of the risks of it.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“The thing that really interests me, right? Is that if you have all of these differentiated cloud computing providers and they've decided they need a commodity and compute, CoreWeave just exists to provide that commodity to them? Can't something else provide that commodity to them? Shouldn't they build their own data centers?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“This is fun. Their customers are Microsoft, NVIDIA, Meta, and a number of other places that need essentially overflow compute. If you do a contract with, let's say Microsoft, it may turn out that Microsoft just doesn't have the capacity to execute your contract. And so then they will push something, maybe something less valuable. Who knows? I don't know how they make these decisions. They'll push it over to Coreweave in order to execute the contract.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Really, the heart of it for me, you know, Amazon and Google and Microsoft, they compute to be these huge hyperscaler clouds, but they have many, many ways to compete beyond just price. Coreweave is competing on what feels like price, maybe data center buildout or energy contracts or preferential energy pricing. Who are its customers for that?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“It's a little more sophisticated than that, but not a lot more sophisticated than that, because it turns out the way that you connect the chips really matters in terms of being able to get good performance and good uptime out of them. And it also turns out that it's really hard to get energy, and that is a major supply constraint on AI right now. CoreWeave has a pretty good track record of getting energy, and they also have relatively good engineering and can charge a premium for renting out their chips, essentially. It's not a huge moat. It's not necessarily a durable mode either because if they lose the engineering advantage they've got, then they are basically in a situation where they're competing on price, and that's not a situation where they can win.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Middle layer of infrastructure that the big clouds have is it really just we're going to put the chips in a room and lease them out to you and you can do whatever you want or is there something else about this company that makes it have more of a moat?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“So let me just put this in broader context, and you can explain to me how Core Weave is the same or different than the cloud providers we're familiar with. Amazon built AWS is still the leading cloud provider in the entire game. Google built Google Cloud. Microsoft has Azure. Those, in my mind, were as much about the software and services that ran on the data centers as they were about the chips, right? If you use AWS, Amazon builds you a bunch of primitives, you can just stand up a service and application, something in the background very, very quickly using Amazon's resources. They will manage demand. They will manage rolling more compute at you if you need to. And Amazon is going to take over a bunch of parts of running the data center for you so you can just focus on your application. Same with Google, same with Microsoft. In their lock-in was all of that service provisioning, right? They're going to do all this work for you. Coreweave is just selling chips, right? It doesn't have that.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“So one of the investment theses you hear that sounds really smart and sophisticated is, oh, we're not investing in direct AI companies. We're investing in the picks and shovels. Selling the picks and shovels during a gold rush, that does seem smarter than trying to go pan for gold. I thought, okay, well, let's go look at the data centers. Those are essentially the picks and the shovels, right? The thing about Coreweave is that it's one of a group of companies called a NeoCloud. And they essentially just make data centers that they then lease out to people. Because it has gone public recently, there is more information available about it than there is about a lot of other things because of that beautiful S1 they filed. I was thinking, oh, I'll just get some thoughts about like data center economics. Can people get their investment back? Like, is this going to have a return?”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Very excited to talk to you about this story. When you start reporting on AI, you end up being asked if things are a bubble. And when you start reporting on a bubble, you land at Coreweave pretty directly. That has been your experience. It's been my experience. Explain to people why even talking about the idea of an AI bubble leads you to core weave as quickly as it does.”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT
“Hello and welcome to Decoder. I'm Neil Patel, editor in chief of the Verge. And Decoder is my show about big ideas and other problems. So a lot of people think AI is a bubble. A lot of people, including people like OpenAI CEO Sam Altman, who keeps running around telling everyone that he thinks AI is a bubble all the while raising and spending enormous amounts of money that seem like bubble indicators to everyone else. This is all pretty confusing, so we set Verge Senior Reporter Liz Lapato out to report on this supposed AI bubble, whether it's real, how it might pop, and what all this might mean. And she's joining the show today to talk about one particular company that sits right in the middle of all of it. That company is called Coreweave, and Liz has spent considerable time digging into its history, its financials, and the truly fascinating story that all of it tells us about the modern AI boom. Liz actually has a big story about CoreWeave running next week on the Verge. So if you want even more detail after you listen to this episode,”
2025-11-13 · Decoder with Nilay Patel · The company at the heart of the AI bubble · IDENTIFIED FROM THE TRANSCRIPT