The demand for GPUs, which are ideal for training and running generative AI models, is high and installing them is expensive, leading many developers and organizations to turn to the cloud. CoreWeave, for example, offers rental of an Nvidia A100 40GB for $2.39 per hour, significantly cheaper than Azure or Google Cloud. The company even signed a multi-billion-dollar deal with Microsoft last year to help power OpenAI's generative AI models. Nvidia, which supplies most of CoreWeave's chips, reportedly sees this trend as beneficial and has given some alternative cloud providers preferential access to its GPUs.
Key takeaways:
- GPU infrastructure provider CoreWeave raised $1.1 billion in new funding, bringing its valuation to $19 billion and its total raised to $5 billion in debt and equity.
- Other companies in the alternative cloud space, such as Lambda Labs, Voltage Park, and Together AI, have also secured significant funding, driven by the demand for generative AI.
- Alternative cloud providers can offer cheaper rates for GPU usage compared to major cloud computing platforms like AWS, Google Cloud, and Microsoft Azure. For example, renting an Nvidia A100 40GB on CoreWeave costs $2.39 per hour, compared to $3.40 on Azure and $3.67 on Google Cloud.
- Even some Big Tech firms have begun to use alternative cloud providers due to compute capacity challenges. Microsoft, for instance, signed a multi-billion-dollar deal with CoreWeave to help power OpenAI's generative AI models.