Technology

Microsoft is getting more cautious about investments as it allows OpenAI to buy $12bn worth of CoreWeave data capacity

March 29, 2025

Microsoft pulled out of a $12bn deal with CoreWeave, citing delays
OpenAI took over the contract, backed by Microsoft’s own investment funds
AI sector remains a closed loop driven by a few dominant players

CoreWeave is eyeing a huge (potentially $2.5 billion) IPO in the coming weeks, but it has also had a few unflattering news stories to contend with recently.

Jeffrey Emanuel, whose viral essay described Nvidia as overpriced and led to it losing $600 billion in a single day, has described CoreWeave as a turkey and called it the “WeWork of AI”.

More recently, Microsoft chose to walk away from a nearly $12 billion option to buy more data-center capacity from the AI hyperscaler.

OpenAI to the rescue

The Financial Times (FT) reported sources familiar with the matter saying Microsoft had withdrawn from some of its agreements “over delivery issues and missed deadlines” which shook the tech giant’s confidence in CoreWeave.

The FT added that despite this, Microsoft still had “a number of ongoing contracts with CoreWeave and it remained an important partner.”

Microsoft is CoreWeave’s biggest customer, and the AI hyperscaler refuted the FT‘s story, saying “All of our contractual relationships continue as planned – nothing has been cancelled, and no one has walked away from their commitments.”

Shortly after that news broke, it was reported that OpenAI would be taking up Microsoft’s nearly $12 billion option instead, helping CoreWeave avoid a potentially embarrassing setback so near to its closely watched IPO.

Rohan Goswami at Semafor made a couple of interesting observations on the news, noting, “This isn’t a sign that Microsoft is pulling back on AI – “We’re good for our $80 billion,” Satya Nadella said on CNBC – but an indication that the company is being more tactical about exactly when and where it spends. At the same time, OpenAI’s biggest backer is Microsoft, meaning that OpenAI is paying CoreWeave with money that is largely Microsoft’s to begin with.”

He described this as the rub, saying, “The AI economy is currently a closed loop and will stay that way until a broader swath of economic actors like big and medium-sized companies start spending real dollars on AI software and services. Until then, nearly all the money is coming from a few companies – chiefly Nvidia and Microsoft – which themselves depend on the goodwill of their public shareholders to keep underwriting it all.”

Cookie	Duration	Description
cookielawinfo-checkbox-analytics	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional	11 months	The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy	11 months	The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

LEAVE A REPLY Cancel reply

EDITOR PICKS

POPULAR POSTS

QUICK LINKS

ABOUT US

FOLLOW US

Cookie bar