CoreWeave CEO pushes back against circular investment concerns

In an interview with CNBC’s Jim Cramer on Wednesday, CoreWeave CEO Michael Intrator said such a narrative was “fundamentally flawed,” dismissing concerns that the company’s deals with other AI giants were cyclical investments.

“The reality of the situation is that the really big, really important tech companies in the space are buying infrastructure to deliver this to their customers — Meta, Microsoft, you know, Amazon, Google,” Intrator said. “So the biggest tech companies in the world are buying this infrastructure because there’s demand. There’s nothing cyclical about it.”

CoreWeave, which sells cloud infrastructure for artificial intelligence, went public in March. It was the largest US tech IPO since 2021 and managed to raise $1.5 billion from the sale of shares. The stock has rallied since then as investors’ appetite for AI and data centers continues to grow. It is now up more than 200% since its debut on Wall Street.

CoreWeave is a major supplier to OpenAI and announced late last month that it would expand its existing deal with the maker of ChatGPT by $6.5 billion, bringing its total contracts with the company to $22.4 billion. Just a few days later, CoreWeave signed a $14.2 billion deal. Meta. In early September, the company also announced that it had received an order worth at least $6.3 billion from the chip maker. Nvidiaone of its most important supporters. Nvidia was already a major CoreWeave supplier, and the latest agreement states that Nvidia is “obligated to purchase any remaining unsold capacity” by April 2032.

Some on Wall Street worry that these deals, and many others in Big Tech, are also alarming circularThis means that money is transferred from one company to another.

But Intrator insisted the deals represented “a basic infrastructure build.” When such a large infrastructure buildout is involved, “it’s not uncommon to see partnerships as people try to provide infrastructure services to consumers,” he said, adding that this dynamic is occurring in other markets as well.

“This narrative about circular investing is, you know, the topic of the day, but it will pass,” he said. “Because the fundamental drivers in the market are huge.”

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Disclaimer CNBC Investment Club owns shares of Nvidia and Meta.