CoreWeave turns to customer prepayments, shorter contracts to fund AI growth

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CoreWeave is increasingly asking customers to pay upfront, borrowing against specific contracts, and even looking to short-term deals that could lead to higher prices, according to the company’s third-quarter earnings.

CoreWeave is rewriting how it pays for the AI boom, according to the company’s third-quarter earnings, reported on Tuesday. CoreWeave, a neocloud that rents out the computing power behind AI, said it’s increasingly asking customers to pay up front, borrowing against specific contracts, and even pursuing short-term deals that could lead to higher prices.

The new strategies could help CoreWeave finance its growth more efficiently while squeezing more cash from existing infrastructure. But these bets only hold if today’s demand and pricing power continue.

CoreWeave reported $3.66 billion in revenue, up 168% from the year prior, but it also posted a $709 million net loss and $846 million in quarterly interest expense.

“We will not use the unsecured debt market to fund our business at current yields, nor do we need to,” CoreWeave CEO Michael Intrator said during Tuesday’s earnings call.

Instead, CoreWeave’s plan is to rely on loans backed by specific customer contracts, drawing on funds as needed to finance most of infrastructure it still has to build to deliver on its significant backlog of $132.5 billion.

CoreWeave also said it expects about $9 billion in customer prepayments and deposits over the next three months, including more than $3 billion tied to signing new customer contracts for capacity it has already built, which requires no additional spending on hardware.

Rivals Nebius and IREN have also relied on hefty Microsoft prepayments to pay for computing capacity, signaling that the industry is moving toward asking Big Tech to pay up for their buildouts.

Upfront payments could alleviate CoreWeave’s immediate borrowing needs, but they also commit the company to providing services at a price that might be less attractive down the road if compute demand continues to surge.

CoreWeave is also looking to capitalize on that growing demand by signing more shorter-term contracts that can command much higher prices.

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