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CoreWeave Beats Q2 Revenue Estimates on AI Demand but Posts Larger Loss

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Cloud services provider CoreWeave exceeded second-quarter revenue expectations on Tuesday, driven by strong demand for AI infrastructure, but a larger-than-expected net loss pushed its shares down 10% in after-hours trading.

REVENUE AND BACKLOG

  • Q2 revenue: $1.21 billion (est. $1.08B)

  • Revenue backlog: $30.1 billion as of June 30, up from $25.9 billion on March 31

  • Annual revenue forecast: Raised to $5.15–$5.35 billion from prior $4.9–$5.1 billion

LOSSES AND COSTS

  • Net loss: $290.5 million (est. $190.6M)

  • Operating expenses: Jumped to $1.19 billion from $317.7 million a year earlier
    CEO Michael Intrator noted the main challenge is accessing power shells to support AI infrastructure at scale.

AI GROWTH AND STRATEGY
CoreWeave operates 33 AI data centers in the U.S. and Europe and provides access to Nvidia chips for enterprises training large AI models.
The company highlighted rising demand for AI inference, particularly chain-of-thought reasoning models, which significantly increase computational requirements.

M&A AND CUSTOMER CONCENTRATION

  • CoreWeave’s $9 billion all-stock acquisition of Core Scientific will secure 1.3 GW of power under contract, though some shareholders oppose the deal.

  • The company acknowledged that its reliance on large customers like OpenAI is both a strategic advantage and a potential risk.

  • Contracts with hyperscalers have been expanded to meet growing demand.

MARKET RESPONSE
Shares fell 10% after-hours to $133.71, despite nearly tripling since the March IPO. Analysts noted that strong revenue visibility is tempered by cost growth and customer concentration risks.

Musk Threatens Legal Action Against Apple Over App Store Rankings

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Elon Musk announced on Monday that his AI startup xAI will pursue legal action against Apple, accusing the tech giant of violating antitrust rules by allegedly favoring OpenAI’s ChatGPT in App Store rankings.

Musk claimed Apple’s App Store policies make it “impossible for any AI company besides OpenAI to reach #1,” calling the practice a “clear antitrust violation.” At present, ChatGPT is ranked first in the U.S. App Store’s “Top Free Apps,” while xAI’s chatbot Grok stands in fifth place.

Musk also criticized Apple for not featuring X (formerly Twitter) or Grok in its “Must Have” section, despite X being the “#1 news app globally” and Grok ranking among the top five apps. He suggested Apple might be “playing politics” in its selection process.

Apple, OpenAI, and xAI did not respond to Reuters’ requests for comment. However, OpenAI CEO Sam Altman pushed back against Musk’s claims, pointing out the irony by referencing Musk’s own alleged efforts to manipulate X for personal advantage.

Community fact-checkers on X highlighted that other AI apps, such as China’s DeepSeek and Perplexity AI, have reached the top spot in the App Store this year, undermining Musk’s argument that only OpenAI benefits from Apple’s system.

The dispute comes amid increasing regulatory scrutiny of Apple’s App Store dominance. Earlier in 2024, the EU fined Apple €500 million ($581 million) for anti-competitive practices, ruling that the company’s restrictions prevented app developers from directing users outside the App Store ecosystem.

Musk’s challenge may add further pressure to global regulators already investigating Apple’s control over app distribution and its partnerships with AI companies.

SoftBank Acquires Foxconn’s Ohio EV Plant to Support Stargate AI Infrastructure Project

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SoftBank Group Corp (9984.T) is purchasing Foxconn Technology Group’s (2317.TW) electric vehicle manufacturing plant in Ohio to further its ambitious Stargate project aimed at building extensive AI data center infrastructure across the United States, Bloomberg News reported on Friday. The Stargate initiative, unveiled by U.S. President Donald Trump in January, represents a private sector investment potentially reaching $500 billion, with backing from SoftBank, OpenAI, and Oracle (ORCL.N).

SoftBank reportedly faced challenges in its financial planning for Stargate and sought Foxconn’s involvement to facilitate the development of data centers and related infrastructure, leading to the acquisition. The Ohio facility is expected to be repurposed as a data center site. Reuters could not independently confirm the report; SoftBank declined to comment, and Foxconn did not immediately respond.

The Stargate Project aims to generate over 100,000 jobs across the U.S., aligning with national goals to boost AI infrastructure and domestic technological capacity.