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From Bitcoin Joke to AI Powerhouse: The Meteoric Rise of CoreWeave



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From Joke to Juggernaut: The Rise of a Cryptominer to a Multi-Billion Dollar AI Powerhouse

In a whimsical turn of events, Brian Venturo, alongside his hedge fund friends, initially acquired their first GPUs as a part of a sophisticated prank. Back in the tail end of 2016, they indulged in the thrill of gambling with something that could either be worthless or extremely valuable, opting to place bets on their pool and fantasy football leagues using bitcoin rather than traditional currency. As bitcoin values skyrocketed, Venturo and his crew came to the realization, “Perhaps it’s time to get serious about this.”

The group of friends quickly purchased graphics processing units (GPUs) for immediate delivery from Amazon, motivated to begin bitcoin mining while their excitement was at its peak. These high-powered chips are highly valued for their capacity to efficiently process the complex calculations required for mining cryptocurrencies. What started as a hobby eventually evolved into a venture named Atlantic Crypto, which expanded from occupying a garage to filling up entire warehouses with GPUs. The company also offered some of their high-performance chips for rent over the internet to individuals interested in mining cryptocurrencies from home. As the value of cryptocurrencies increased, the essence of time became increasingly important, leading the firm's technicians to become adept at installing GPUs quickly and maximizing their output.

As cryptocurrency values plummeted at the onset of 2019, Venturo and his team shifted their strategy. They secured funds to purchase discounted GPUs from failing cryptocurrency miners, rebranded to CoreWeave, and launched a specialized cloud service leveraging their vast inventory of GPUs. This service was aimed at entities requiring high-powered processors, such as visual effects companies and AI startups. GPUs play a critical role in machine learning endeavors, including the development of algorithms for image or text processing. Initially, CoreWeave was not well-known within these sectors, yet they managed to attract clients by prioritizing and swiftly resolving support issues. “Issues were dealt with in as little as 15 minutes,” recalls a manager from that period. “The level of commitment to customer satisfaction was exceptional.”

The landscape shifted dramatically when OpenAI introduced ChatGPT towards the end of 2022, sparking a surge in interest and investment in generative AI technology. This surge led to a significant shortage of GPUs, particularly those manufactured by Nvidia, which were highly sought after. CoreWeave, with its several data centers filled with GPUs and a well-established partnership with Nvidia, quickly became a critical player in the booming AI sector. The company attracted major clients, such as Microsoft, a key backer of OpenAI, and the image-generation startup Stability AI, as noted by individuals who previously worked at CoreWeave. Venturo's main lament was his failure to procure more Nvidia chips when he had the chance. He believes that, had he had an unlimited supply, he could have sold everything within two weeks.

Despite potential challenges, CoreWeave successfully navigated increased demand for its GPUs throughout 2023. The firm reinvested its growing profits into acquiring more chips and expanding its data center infrastructure. Initially starting as a modest venture for extra income, the company has since shifted its focus entirely away from cryptocurrency to concentrate on cloud computing. In the last year, the startup secured a $2.3 billion loan, using its GPUs as security, and attracted nearly $2.2 billion in investment capital. This includes a significant $1.1 billion funding round just this week, with contributions from notable investors like Nvidia. Following this recent financial boost, CoreWeave's market value soared to $19 billion.

By the year's close, CoreWeave anticipates its expansion to encompass 28 data center campuses distributed over numerous US states, as well as in Europe and possibly Asia,">king an increase of over ninefold from its size at the start of 2023. Venturo, currently serving as CoreWeave’s chief strategy officer, attributes this expansion to long-term agreements with major AI firms. He comments on the transformation, noting, “This small cloud-based startup has evolved into a major powerhouse, a change driven by our unique beginning and our capacity to scale up quickly and efficiently.”

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For a portion of CoreWeave's workforce, which numbers 550, the fast-paced environment has manifested as a demanding work culture characterized by long hours and intense managerial pressure, which seems unmanageable, say six ex-employees who chose to remain anonymous to prevent any backlash. However, given the ongoing surge in AI, it appears unlikely that CoreWeave will decelerate its pace.

Essential Elements

Graphic Processing Units (GPUs) are crucial for the development and functioning of machine learning platforms such as OpenAI's GPT-4, which require the analysis of extensive data, understanding user inputs, and generating sophisticated text or impressive visuals. The startup Databricks undertook a massive project to develop an open-source AI model to compete with GPT-4. This endeavor utilized 3,072 Nvidia H100 GPUs, introduced in March of the previous year, for a duration of three months, incurring a cost of approximately $10 million in cloud computing expenses. Expenses of this magnitude are significantly depleting the $29.1 billion in funding that generative AI enterprises secured last year, as estimated by the market analysis firm PitchBook.

CoreWeave's remarkable performance in 2023 has become a benchmark that existing and emerging competitors strive to emulate. Companies like Applied Digital, Hut 8 Mining, and Iris Energy, which are primarily involved in cryptocurrency mining, are pivoting to tap into the AI market by leasing out their surplus GPU resources to software developers. As the profitability of bitcoin mining decreases, an increasing number of GPUs are expected to become available for AI applications.

Key cloud computing companies are investing significantly to enhance their cloud services with GPUs and specialized AI chips. Amazon has announced its intention to invest nearly $150 billion in data centers over the coming 15 years. Microsoft has indicated plans to triple its data center expansion in the latter half of this year, while Google has recently revealed a $3 billion investment plan to construct and enlarge two data centers in the US.

CoreWeave distinguishes itself as one of the mere seven entities designated as "elite" cloud partners in the United States by Nvidia, a status not even behemoths like Amazon have achieved. This prestigious recognition could potentially position CoreWeave favorably for accessing GPUs during periods of limited availability. However, the leader of Nvidia's investment division emphasized to the Financial Times previously that this partnership doesn't necessarily place anyone ahead in line. CoreWeave's key to success might lie in its agility and innovative spirit, allowing it to navigate challenges with ease. According to Venturo, the company's resilience is attributed to its resourcefulness and inventive approach.

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Meeting the global increase in demand for AI-driven chatbots and image creation tools relies not only on advanced graphics processing units (GPUs) but also on ordinary parts. At certain points, server racks, which are robust metal structures designed to house GPU setups, have become a significant limiting factor.

In its rush to expand its infrastructure, CoreWeave mistakenly purchased 1,400 incorrect cabinets, a blunder that proved expensive due to prolonged delays in receiving new shipments caused by supply chain issues. "When you're operating at such a fast pace, a breakdown in the process can occur, and you might not notice until there are 17 tractor trailers filled with the wrong cabinets parked outside, and you're forced to send them back," Venturo explains.

In a display of the cunning that has been crucial for swift growth, Venturo's crew, during the crisis, promptly let go of any irritation and opted to purchase second-hand cabinets from what he referred to as the gray market. This action averted a major setback. "This was merely one example of the hurdles we encountered and surpassed to ensure we met our partners' expectations," he states.

In an effort to maintain momentum, CoreWeave has resorted to unconventional sources beyond just sourcing cabinets. The company has procured networking switches and routers from eBay to avoid delays that could extend up to two years for brand-new equipment, according to a previous employee. While the dependability and security of second-hand components might raise concerns, the rapid pace of the AI surge has necessitated setting aside traditional methods, the individual notes. However, Venturo mentions that CoreWeave no longer relies on eBay for these needs.

In Plano, CoreWeave managed to set up four 1-megawatt data center halls within less than three days each last year, a task that typically spans several weeks. "We have the ability to dive in full force and construct at an accelerated pace," Venturo states.

CoreWeave encountered a challenge with a delayed broadband installation at a new location, a scenario many residential internet customers might recognize. In response, three top officials convened over a phone call one morning to brainstorm solutions to keep the project on track. Coincidentally, they all proposed the same solution: acquiring satellite internet via Elon Musk’s SpaceX's Starlink service, which is known for its ease of use but higher cost, as a temporary measure until the original internet service was established. This strategy successfully prevented any further hold-ups. Venturo emphasizes, "Flexibility is crucial for us."

Chaos and Order

CoreWeave has taken valuable insights from its initial endeavors to shape its current operational methodologies. The company willingly incurs extra costs for the bespoke production of numerous fiber-optic cables, which, due to their unique construction, can be installed in merely an hour rather than the conventional ten hours. When a critical consignment was delayed by US customs, CoreWeave swiftly diversified its import strategy by utilizing several different entry points. To circumvent potential supply deficits, it now procures significantly more components than necessary, with the rationale that any surplus can be utilized for future projects.

Occasionally, rushing has led to unintended outcomes. According to one informant, CoreWeave's data center in Las Vegas carries the lingering scent of scorched plastic. This is attributed to the facility overloading its electrical system by activating too many graphics processing units simultaneously during its initial setup a few years back.


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Central to CoreWeave's functioning are its data center technicians, who are the backbone of the company. Their top technicians function similarly to an elite task force, traveling between locations to initiate new data centers rather than being stationed at a single site. While Venturo doesn't reveal the total distance his elite team of technicians has traveled, he mentions that they laid approximately 6,000 miles of fiber-optic cables in the previous year. "They are arguably the team I spend the most time with, above all others within the company, due to their critical role," he states.

Ex-employees of CoreWeave have expressed that the work environment is excessively demanding. There seems to be a presumption of constant availability from the staff. Their private contact numbers are displayed on their corporate Slack profiles without an option for removal. One previous staff member mentioned it was bothersome as it allowed coworkers to message them about work matters during unconventional times.

Venturo notes that he initiated weekly massage sessions for the staff at CoreWeave's main office in New Jersey a couple of years back, upon realizing his personal discomfort with back and neck pains while working. He reasoned, "If I'm experiencing this, it's likely others are as well." However, a previous employee mentioned that it was primarily the executives who actually felt at ease using this service in the workplace.

According to Venturo, there's a justification for the high expectations placed on employees. "Our entire focus is on pinpointing and eliminating obstacles," he explains. "We encourage our teams to act swiftly, and in times of difficulty, we support them by collaboratively addressing the issues."

As CoreWeave expanded, its ability to deliver reliable services was occasionally hindered by understaffing and limited equipment availability. The shift away from cryptocurrency activities led to an uptick in server downtime, exacerbated by the fact that, until not long ago, the company relied on a single engineer to oversee system reliability, according to statements from former staff members. Additionally, there were instances when CoreWeave struggled to have an adequate supply of working GPUs to meet its contractual requirements, as indicated by two informants. One of them highlighted a consistent shortfall in reserve GPUs. In an effort to mitigate these challenges, the company sometimes bypassed testing for newly installed GPUs, as reported by these two individuals. In an internal Slack conversation reviewed by WIRED, a vice president expressed a lack of alternatives to this approach. However, Venturo has asserted that CoreWeave's testing infrastructure is specifically designed to help clients launch their services on schedule.

The rapid growth of CoreWeave has led to the sidelining of some issues, including the assessment of its ecological footprint, as pointed out by ex-employees. However, Venturo highlights that the majority of CoreWeave's data centers run entirely on renewable energy sources and the company avoids establishing data centers in high-risk areas like flood zones, which are difficult to insure. He emphasizes that the company's swift expansion hasn't forced them into making hasty, ill-considered decisions. When questioned about the possibility of CoreWeave publishing a sustainability report to disclose its water consumption and initiatives to minimize emissions throughout its supply chain, similar to what other cloud service providers have done, Venturo mentioned to WIRED in October that information would be forthcoming soon. Nevertheless, the company has not yet made such a report available.

Behind the Mechanics of AI Assistance

Should you have engaged with ChatGPT, Copilot from Microsoft, or any similar AI-driven tools, including the image generator Stable Diffusion, it's likely you've benefited from the intensive efforts of CoreWeave.

According to sources, the firm has established facilities for Microsoft with contributions from OpenAI, and it is also operating a supercomputer data center for Nvidia in Plano, Texas, as confirmed by the semiconductor company. The Plano campus of CoreWeave was built at a cost of approximately $1.6 billion and spans about 450,000 square feet, equivalent to the size of the biggest Ikea store in the United States. Additionally, there is a dedicated facility in Oregon for a solo client, serving the startup Inflection AI, which specializes in business chatbot software. According to Venturo, these locations generally house between 16,000 and 32,000 GPUs.

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CoreWeave has several locations that provide GPU services to a variety of clients, including Stability AI, the creators of an image generation tool, and Anlatan, the company behind the writing tool NovelAI. These facilities cater to a wide range of applications by offering more economical options like the Nvidia A100s, released in 2020. They are strategically situated on the outskirts of major urban areas—Venturo refers to these locations as being in cities that host National Football League teams—to reduce the time it takes for users to receive their AI-generated content. Venturo emphasizes, "Our goal is to create a cloud platform that meets the dynamic and flexible needs of our clients."

CoreWeave has expanded its presence through various means, including constructing new facilities, occupying vacant properties, and renting fully operational data centers from third parties, one of which was a bitcoin mining operation. This flexible approach positions CoreWeave favorably in the industry. According to Raul Martynek, the CEO of DataBank, a data center company, businesses that provide GPU services like CoreWeave potentially enjoy gross profit margins of up to 70 percent by sidestepping the expenses associated with building their own infrastructure from scratch. Venturo opted not to discuss gross margin details.

Major cloud service providers, including Amazon and Google, have the potential to edge out smaller competitors such as CoreWeave by offering lower prices once the demand for GPU usage levels off. However, Tony Harvey, who is a senior director analyst at Gartner focusing on data centers, believes that a specialized provider like CoreWeave may still find a way to thrive. "They're facing a challenging situation, and it will require significant effort on their part to navigate it successfully," he notes.

A pressing concern for CoreWeave and the broader data center sector is the potential for growth to be hampered by power shortages, stemming from insufficient development of new electricity and transmission infrastructure. Currently, large cloud providers like Microsoft in the US use around 11 gigawatts of electricity, with smaller entities like CoreWeave consuming a similar amount, reports property company JLL. This consumption is anticipated to increase by an average of 20 percent each year until 2030, reaching a total of approximately 79 gigawatts for both groups combined.

Venturo mentions that CoreWeave has opted not to establish a data center in the highly sought-after area of Northern Virginia due to the intense competition for electricity access. However, he suggests that the company might only need one innovative strategy to surpass its competitors.

As of May 3, 2024, at 5:05 PM EDT, CoreWeave has provided further commentary, leading to an update of this article.

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