Microsoft CEO Satya Nadella
Jordan Novit | CNBC
MicrosoftA huge investment in OpenAI puts the company at the center of the AI boom. But that’s not the only place the software giant is opening its wallet to meet growing demand for artificial intelligence services.
CNBC has learned from people familiar with the matter that Microsoft has agreed to invest billions of dollars over several years in the startup CoreWeave for cloud computing infrastructure, Announce On Wednesday, it raised $200 million. The funding comes just over a month after the company hit a $2 billion valuation.
CoreWeave Sells Simplified Access Nvidia’s Graphics Processing Units, or GPUs, which are considered the best in the market for running AI models. Microsoft signed the CoreWeave agreement earlier this year to ensure that OpenAI, which operates the viral ChatGPT chatbot, will have enough computing power in the future, said a person familiar with the matter, who asked not to be named. OpenAI relies on Microsoft’s Azure cloud infrastructure for its massive computing needs.
Both Microsoft and CoreWeave declined to comment.
The generative AI craze kicked off late last year after OpenAI launched ChatGPT to the public, demonstrating that AI can take human input and generate complex responses.many companies, including Google, and have since rushed to add generative artificial intelligence to their offerings. Microsoft has been busy releasing chatbots for its own services, such as Bing and Windows.
With so much demand on its infrastructure, Microsoft needed to take advantage of Nvidia’s GPUs in other ways. CoreWeave CEO Michael Intrator declined to comment on the Microsoft deal in an interview last month, but said revenue “grows many times from 2022 to 2023.”
Nvidia-backed startup Coreweave is based in Roseland, New Jersey, and has 160 employees.
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CoreWeave announced on Wednesday that it has secured funding from hedge fund Magnetar Capital, which is $221 million round in April. Nvidia invested $100 million in previous funding, Intrator said. CoreWeave was founded in 2017 and has 160 employees.
Shares of Nvidia are up 170% this year. The company’s market capitalization topped $1 trillion for the first time this week after issuing a forecast for the July quarter that beat Wall Street expectations by more than 50%.
Nvidia treasurer Colette Kress said on last week’s earnings call that the chipmaker’s growth will be “driven primarily by data centers, reflecting a sharp rise in demand related to generating AI and large language models.” OpenAI’s GPT-4 large language model, Train with Nvidia GPUs Based on extensive online data, it is the core of ChatGPT.
Kress mentioned CoreWeave on the conference call, and Nvidia CEO Jensen Huang mentioned CoreWeave in a presentation at Nvidia’s GTC conference in March.
CoreWeave website Claims that the company can provide computing power “80% cheaper than traditional cloud providers.”Among other graphics cards, CoreWeave offers Nvidia’s A100 GPU, and developers can also amazonGoogle and Microsoft clouds.
In addition, CoreWeave offers cheaper Nvidia A40 GPUs, which are aimed at visual computing, and the A100, which is aimed at artificial intelligence, data analysis, and high-performance computing. Some CoreWeave customers have struggled to get enough GPU power on large clouds, Intrator said. Sometimes, potential customers ask for Nvidia’s A100 or the newer H100 GPU, and the company recommends the A40 GPU instead.
These “will do a great job at a very cost-effective price,” Intrator says.
Microsoft has partnered with Oracle Regarding the issue of the two companies renting servers from each other when they need to increase capacity, Information reported earlier this month, citing an unnamed person.
watch: DA Davidson’s Gil Luria says Microsoft is ‘just getting started’ in AI
