CoreWeave Raises Loans Against Contracts to Expand AI Infrastructure
CoreWeave expects to receive approximately $9 billion from clients over the next three months and is taking out loans against contracts to build infrastructure for a $132.5 billion backlog.
CoreWeave is changing its approach to financing the expansion of artificial intelligence infrastructure. The company combines client prepayments with loans secured by specific contracts and is increasing the share of short-term agreements.
Expected receipts include over $3 billion from new contracts for already built capacities, which will not require additional equipment purchases to fulfill. This scheme may reduce the need for immediate borrowing and accelerate the use of existing infrastructure.
CEO Michael Intrator stated that the company does not plan to raise unsecured debt at current bond yields. Instead, CoreWeave will receive funds through loans in tranches, as needed for constructing facilities under already signed agreements.
Short-term contracts allow for more frequent price reviews. According to Intrator, CoreWeave sells capacity under such agreements for more than $40 million per megawatt per year. For new facilities with four- or five-year contracts, the price is $20–25 million per megawatt per year.
In August, the company closed a $2.6 billion loan designed specifically for short-term contracts. However, this model has a downside: lenders typically value long-term agreements more highly, as they provide a more predictable cash flow. Therefore, rising prices and demand could increase CoreWeave’s profits but simultaneously raise risks when renewing contracts and amid changing market conditions.
