Core Scientific (CORZ) shares down 15% pre-market on Microsoft (MSFT) CoreWeave (CWAV) cloud computing deal pullback

Shares of bitcoin (BTC) miner Core Scientific (CORZ) were down 15% in pre-market on Thursday after reports that Microsoft (MSFT) has pulled back from some agreements with soon to listed cloud computing firm CoreWeave.

Shares of bitcoin (BTC) miner Core Scientific (NYSE:CORZ) were down 15% in pre-market on Thursday after reports that Microsoft (NASDAQ:MSFT) has pulled back from some agreements with soon to listed cloud computing firm CoreWeave (NYSE:CORE).

Last month, Core Scientific said it was planning a $1.2 billion data center expansion with CoreWeave. This week, CoreWeave filed for an intital public offering, hoping to raise $4 billion at a $35 billion valuation.

But according to an FT article, CoreWeave, which supplies artificial intelligence (AI) computing power to Microsoft, was facing delivery issues and missed deadlines, leading the tech giant to scale back some of its commitments. However, it remains a major partner to the firm.

Microsoft’s contribution is significant, making up 62% of CoreWeave’s revenue, and the company has pledged over $10 billion in spending on its services by 2030.

CoreWeave has expanded rapidly, generating $1.9 billion in revenue in 2024 but reporting substantial losses. It is heavily reliant on Nvidia’s (NASDAQ:NVDA) AI chips and has raised a total of $14.5 billion through debt and equity.

The report also mentions that Microsoft’s decision aligns with its shifting strategy in AI infrastructure, moving away from concentrating on a small number of mega-suppliers. Despite this adjustment, Microsoft continues to invest heavily in the AI sector.