Meta’s New Cloud Business Impacts AI Cloud Specialists
Meta Platforms is developing a cloud business to sell AI computing power, affecting its major customers in the sector. This move caused shares of CoreWeave (NASDAQ: CRWV) to drop 13.9% to $85.68 and Nebius Group (NASDAQ: NBIS) to decline 17% to $229.18. Meta’s significant agreements include a $21 billion commitment with CoreWeave and up to $27 billion with Nebius, raising concerns that Meta could reduce its renting from these companies as it builds its capacity.
CoreWeave reported a first-quarter revenue of $2.08 billion, reflecting a 112% year-over-year growth but also a widening net loss of $740 million and total debt of $24.9 billion. In contrast, Nebius experienced a staggering 684% increase in revenue, bringing it to $399 million, and maintained a healthier financial state with $9.3 billion in cash and an adjusted net loss of $100.3 million. The differing financial health and growth rates have led analysts to recommend Nebius over CoreWeave for prospective investors.
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