Key Points
CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ: NBIS) are engaged in significant leases with Meta Platforms (NASDAQ: META) to provide computing power as Meta develops its AI capabilities. Despite these partnerships, both companies experienced stock declines—CoreWeave down 35% and Nebius down nearly 25%—in response to rumors that Meta may launch its own cloud computing service, potentially impacting their demand.
Nebius has a five-year deal to supply Meta with $12 billion in dedicated computing capacity, with an additional $15 billion option, while CoreWeave has a $14 billion agreement. Although this cloud capacity is critical amidst the AI boom, changes in Meta’s strategy could pose risks for these neocloud firms. However, analysts believe that even if contracts with Meta change, CoreWeave and Nebius will likely find alternative clients for their services.
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