Investors are indifferent to CoreWeave OpenAI deal despite AI fatigue

The recent development in the partnership between CoreWeave and OpenAI has raised eyebrows on Wall Street. This newest deal, valued at $6.5 billion, marks the third time the two tech giants have come together in 2025. CoreWeave previously inked agreements with OpenAI in March and May, totaling an impressive $16 billion.

Michael Intrator, CoreWeave’s CEO, expressed his satisfaction with the partnership, highlighting OpenAI’s pioneering efforts in AI technology. As part of the initial deal in March, OpenAI became an investor in CoreWeave, bolstering the AI-focused company’s position in the market. The total value of the collaboration now sits at a substantial $22.4 billion.

Despite the multimillion-dollar deal, CoreWeave saw its shares dip by 5.1% immediately after the announcement, only to soar by a substantial 224.8% since going public a few months earlier. Wall Street seems to have brushed off this development, focusing instead on CoreWeave’s heavy reliance on Microsoft for revenue generation.

Around 71% of CoreWeave’s revenue comes from Microsoft, primarily renting out Nvidia-powered servers for AI workloads. This significant dependence on a single customer raises concerns among investors, posing a potential risk for the company’s long-term growth. However, analysts and industry insiders anticipate more collaborations on the horizon for CoreWeave.

Citizens JPM analysts, led by Greg Miller, foresee additional contracts for CoreWeave due to its business model that revolves around Nvidia’s GPUs. Hyperscale companies show a growing interest in GPU as a Service (GPUaaS) providers like CoreWeave, thus driving the potential for more future agreements.

Citizens JPM projects exponential growth in the GPUaaS market, from $3-4 billion to a whopping $300 billion, reflecting the current demand for AI computing infrastructure. With glowing prospects, CoreWeave maintains its Market Outperform rating and a steady $180 price target despite recent fluctuations in its stock value.

In a bid to diversify its business operations, CoreWeave has been venturing into new initiatives like CoreWeave Ventures to invest in emerging AI-centric startups. Additionally, a recent SEC filing revealed an order from Nvidia worth at least $6.3 billion, safeguarding CoreWeave’s cloud capacity in the event of dwindling demand for AI computing resources. This move provides a safety net for CoreWeave’s revenue stream and underscores Nvidia’s confidence in their ongoing partnership.

While Wall Street may have overlooked the recent CoreWeave-OpenAI deal, the strategic alliance paves the way for exciting growth opportunities and market expansion in the AI industry. CoreWeave’s partnership with OpenAI could position the company as a key player in the evolving landscape of AI technology and infrastructure services.