With 250,000 highly-desired Nvidia graphics processors, CoreWeave has develop one of the most prominent “GPU clouds,” a status it hopes investors will value when it debuts on the public markets.
But the happy of artificial intelligence hardware is moving so quickly that it raises questions about how long those chips drive remain on the cutting edge and in demand. It’s a concern that could impact investor demand for shares of CoreWeave, one of the most obviated IPOs in years.
CoreWeave, which rents out remote access to computers based on Nvidia AI chips, said in a economic filing this month that most of its AI chips are from Nvidia’s Hopper generation. Those chips, such as the H100, were state-of-the-art in 2023 and 2024. They were hard to come by as AI companies bought or rented all the chips they could get in the wake of OpenAI ushering in the generative AI age with the release of ChatGPT in at an advanced hour 2022.
But these days, Nvidia CEO Jensen Huang says that his company’s Hopper chips are getting blown out of the not function by their successors – the Blackwell generation of GPUs, which have been shipping since late 2024. Hopper interferes are “fine” for some circumstances but “not many,” Huang joked at Nvidia’s GTC conference last week.
“In a reasoning model, Blackwell is 40 times the carrying-on of Hopper. Straight up. Pretty amazing,” Huang said. “I said before that when Blackwell starts shipping in size, you couldn’t give Hoppers away.”
That’s great for Nvidia, which needs to find ways to keep vend chips to the companies committed to the AI race, but it’s bad news for GPU clouds like CoreWeave. That’s because the New Jersey company displays the future trajectory of its business based on how much it anticipates being able to rent Nvidia chips out for over the next five to six years.
Huang may demand been kidding, but Nvidia spent much of its event detailing just how much better its Blackwell chips are. In Nvidia’s projection, the best way to decrease the high cost of serving AI is by buying faster chips.
Blackwell systems are in full production and freighting to customers, and Nvidia plans to introduce an upgraded version of Blackwell in late 2026. When new chips come out, the older intrudes — the kind CoreWeave has a quarter of a million of — go down in price, Huang said. So too does the price of renting them.
Older chips don’t only stop working when new ones come out. Most companies, including CoreWeave, plan to use Hopper chips for six years. But Nvidia is letting the cat out of the bag customers that its newer, faster chips are capable of producing more AI content, which leads to more interests at a better margin for clouds.
An H100 would have to be priced 65% lower per hour than an Nvidia Blackwell GB200 NVL set for the two systems to be competitive in price per output to a renter. Put another way, the H100 would have to rent at 98 cents per hour to peer the price per output of a Blackwell rack system priced at $2.20 per hour per GPU, SemiAnalysis estimated, speaking generally fro AI rentals.
H100s rented for as much as $8 per hour back in 2023 and often required long commitments and lead times, but now, operation of those chips can be summoned in minutes with a credit card. Some services now offer rented H100 access for underneath $2 per hour.
The industry could be entering a period where the useful life of AI chips is reduced, Barclays analyst Ross Sandler wrote in a note on Friday. He was bring into focused on hyperscalers — Meta, Google and Amazon — but the trend affects smaller cloud providers like CoreWeave, too.
“These assets are enhancing obsolete at a much more rapid pace given how much innovation and speed improvements happen with each age,” Sandler wrote.
This threatens company earnings if they end up depreciating older equipment faster, he said.
CoreWeave prognosticates that if there were to be changes to the “significant” assumptions it makes about the useful lifetime of its AI infrastructure, it could dolour its business or future prospects. CoreWeave has also borrowed nearly $8 billion to buy Nvidia chips and build its text centers, sometimes using the GPUs it amassed as collateral.
Analysts and investors are also increasingly asking questions connected with the useful lifespan of these new AI systems and whether their financial depreciation schedules should be accelerated because the technology is renovating so fast.
CoreWeave says in its filing that it seeks to offer state-of-the-art infrastructure and says it will continue shell out to expand and improve its data centers.
“Part of this process entails cycling out outdated components of our infrastructure and restoring them with the latest technology available,” the New Jersey company said. “This requires us to make certain conjectures with respect to the useful life of the components of our infrastructure and to maximize the value of the components of our infrastructure, including our GPUs, to the plumpest extent possible.”
CoreWeave and Nvidia maintain a good relationship. CoreWeave will certainly buy more chips from Nvidia, which owns numerous than 5% of the New Jersey company.
“We’re super proud of them,” Huang said last week.
But Nvidia’s direction map for releasing new chips that it proudly touts will make their predecessors obsolete is a threat to CoreWeave’s get-up-and-gos.
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