Meta says it will spend another $21B on CoreWeave’s AI infrastructure

Meta Platforms Inc. said today it will throw an additional $21 billion into artificial intelligence infrastructure provider CoreWeave Inc. as it struggles to keep pace with rival AI developers.

The deal extends the social media giant’s relationship with CoreWeave. In September, it revealed it would spend $14.2 billion on the cloud provider’s AI computing infrastructure. That first agreement was to run until 2031, but the new agreement runs from 2027 to 2032, Meta said, giving it access to CoreWeave’s much-needed services in the coming years.

CoreWeave uses a network of data centers packed with hundreds of thousands of Nvidia Corp. graphics processing units, which are the most popular chips for running AI models. Meta needs access to those resources to meet the growing demand for its AI services. Although it is known to operate dozens of its data centers around the world, demand is so high that it needs to lease additional capacity from providers such as CoreWeave, which also serves Microsoft Corp., OpenAI Group PBC and other AI companies.

In January, Meta said it would spend between $115 billion and $135 billion on AI infrastructure this year, nearly doubling the amount spent in 2025.

Meta has many AI projects. It uses AI algorithms to improve its core advertising business and provides tools for creators across applications such as Facebook, Instagram and Threads. It is also trying to compete with OpenAI, Google LLC and Anthropic PBC as a model frontier developer, but has struggled to match the success of those rivals.

After the disappointing reception of its last Llama models, Meta spent a lot of money to establish a new Superintelligence Labs group led by Alexandr Wang to develop more advanced models. On Wednesday came the culmination of that effort when the company released a new model called the Muse Spark.

With so many AI projects going on, Meta needs tons of computing resources. It has been partnering with CoreWeave since 2023, and today’s deal suggests it sees more value in its infrastructure services than additional capacity. CoreWeave CEO Mike Intrator told CNBC that his company’s AI infrastructure enables Meta to take full advantage of the talent recruited from the Superintelligence Labs division. “They hired all over the place, people who used the infrastructure for all different people, and they came back to us,” he said.

Meta said the latest investment in CoreWeave expands the company’s “portfolio-based approach” to securing AI infrastructure, ensuring it has access to a variety of resources and providers. The deal also helps CoreWeave reduce its reliance on Microsoft, which remains its biggest customer. By 2024, the Redmond-based company accounted for 62% of CoreWeave’s total revenue, but that has been reduced to just 35%, Intrator said.

CoreWeave also said today it will raise an additional $3 billion in capital to further its data base. It has taken out huge loans to try to establish itself as a major player in the AI ​​chip industry, and holds more than $21 billion in debt on its balance sheet by the end of fiscal 2025. Then, in March, it borrowed $8.5 billion to expand its data centers to meet the demands of new signed contracts. Those deals have helped its stock rise 24% in the year to date.

Intrator told CNBC that he expects to strengthen his company’s relationship with Meta even more in the future, as the construction of the AI ​​infrastructure is far from complete. “They will continue to do it for themselves, but they will also continue to do it with us,” he said.

Photo: SiliconANGLE/Dreamina AI