Artificial intelligence-AI for those of us who find “artificial” a bit too much of a mouthful-requires computing power on a scale that is borderline absurd. It’s like trying to power a rocket with a hairdryer. And where do you turn for that kind of electric juice? Nvidia, the company that seems to have cornered the market on these overworked GPUs, is the primary supplier. These little devices are the brains behind most of the AI models we’ve heard about lately, and everyone and their dog wants them.
But here’s the catch: GPUs aren’t cheap. They cost a fortune, and creating the infrastructure to house them? Well, that’s another story entirely. Imagine building a spaceship, and then filling it with engines that cost as much as your house. Sounds fun, right? But not exactly something you can do on a whim. Still, the world is screaming for more AI computing power, and big tech companies can’t sit around twiddling their thumbs while their data centers slowly take shape.
Enter CoreWeave, a company that’s been around long enough to know how to use Nvidia’s GPUs without all the fancy data-center construction. They simply rent out these GPUs, making a tidy little profit while everyone else struggles to build their own space-age facilities. The question is: Can $10,000 invested in CoreWeave make you a millionaire? I wouldn’t bet on it, but let’s dive into this little journey anyway.
CoreWeave’s Rising Star
CoreWeave went public in March. It was a quiet affair, priced at a modest $40 per share. Nobody cared much, and that’s a shame. Because by May, things took a turn. The stock zoomed from $50 to a jaw-dropping $183 in June. In classic fashion, it then did what stocks do when they get too big too fast: cooled off. Right now, it’s hovering around $133, which, frankly, is a little disappointing for those who got in at the high-water mark.
Then there was the announcement. CoreWeave had secured a cool $6.3 billion worth of GPUs from Nvidia. That’s not pocket change, folks. It’s a signal that CoreWeave is not just a fly-by-night operation, but a serious player in the AI space. And with the kind of numbers they’re tossing around, it seems like a lucrative business. The question, of course, is whether that success can last.
But before we get too excited, let’s pause and take a deep breath. CoreWeave, in all its glory, is still not profitable. Now, I know what you’re thinking. “But Kurt, this is a startup! They’re just getting started!” True. But that’s the thing about startups. They run on dreams, hype, and a bit of venture capital. In Q2, CoreWeave posted a net loss margin of 24%. That’s not great, no matter how you spin it. A startup can burn cash for a while, but at some point, you’ve got to turn a profit. Otherwise, you’re just a guy running in place in the middle of a marathon. So it goes.
The Profit Problem
CoreWeave’s business model is as simple as it is expensive. Buy Nvidia GPUs. Rent them out for more than they cost to operate. Easy, right? Well, here’s the thing: these GPUs have a shelf life of about one to three years. That’s not a typo. The shiny new tech you just bought will probably be useless faster than your new phone. So the math gets tricky. If you’re buying something that wears out as fast as your sneakers, the question becomes: Can you rent it out enough times to make back your investment before it dies on you?
And then there’s the big, ugly cloud hanging over CoreWeave’s future: competition. Big players like Amazon and Microsoft are expanding their own AI infrastructure. As these hyperscalers build more of their own computing power, they’ll need fewer rental GPUs. Sure, there will still be demand during peak periods, but the days of hypergrowth might be numbered. CoreWeave’s rapid expansion isn’t something you can take for granted forever. That’s the thing about tech startups-they’re here today and gone tomorrow, like a shooting star that burns out before you can make a wish. So it goes.
So, here’s the final verdict: CoreWeave is not going to make you a millionaire. Not today. Not tomorrow. The stock is hot right now, but that doesn’t mean it’ll stay that way. If you’re itching to make a move in AI, there are better bets. Nvidia, for example, is still a powerhouse. The big hyperscalers might not be as sexy as the upstart, but they’re far more likely to stick around long enough for you to get your money back. If you’ve got your heart set on gambling, however, throw a few chips in CoreWeave’s direction-but don’t bet the farm on it. 🍀
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2025-09-25 12:21