CoreWeave's CSO on the Business of Building AI Datacenters

Tracy Alloway (0:03)

Bloomberg Audio Studios.

Joe Weisenthal (0:05)

Podcasts, radio, news.

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:25)

And I'm Tracy Alloway.

Joe Weisenthal (0:26)

Tracy, we've done tons, of course, on electricity and AI and data centers and all that stuff, but we've never actually done AI. Well, we've never talked to someone who is building data centers, as far as I can recall.

Tracy Alloway (0:42)

Putting it all together, you mean?

Joe Weisenthal (0:43)

Yeah, putting it all together. Just a bunch of, I've had consultants, we've talked to energy people, but how does this business of essentially, I guess, building a building, putting a bunch of chips in there, getting the electricity and then in theory, selling all of that at a markup, how does it actually work?

Tracy Alloway (1:01)

You know what I was reading recently? This is kind of a tangent, but not really, because we're talking about the physical and financial process of building these things. But I saw, this is online, there is a guide to the physical planning around it and an IBM System 360 from 1963 or something.

And it's 213 pages long.

Joe Weisenthal (1:27)

Have you read it yet?

Tracy Alloway (1:28)

I did flip through it. There's guidance on minimizing vibrations, obviously temperature and humidity and stuff like that. I did not read the full 200 pages. But I'm kind of thinking, if this is all the thinking that had to go into one computer, albeit a supercomputer in the 1960s, but a pretty basic machine when we look back on it now, how much planning and thinking has to go into building these huge cloud servers and all their associated infrastructure, both physical and software as well?

Joe Weisenthal (2:02)

No, totally. And one of the ways that we've touched on this subject a little bit is in our conversations with Steve Iseman, who's been investing, at least as far as we know, in a lot of these like industrial HVAC companies and electricity gear companies and stuff like that. So like companies that have actually been around for a really long time, sort of standard cyclical businesses, and then they've like caught the secular tailwind because with this boom in AI data center construction, suddenly there's this sort of continuous bid for all their gear and services.

Tracy Alloway (2:37)

I'm going to start an anti-vibration floor maker or something. Do you think that's a viable business? Does anyone care about vibrations anymore?

Joe Weisenthal (2:44)

I am certain that in various high tech environments, you do not want to have vibrations. You have like valuable chips. You don't want them to be like degrading.

Tracy Alloway (2:54)

Because people are walking around.

Joe Weisenthal (2:56)

Yeah, or just all the machine and all your air conditioners and cooling equipment and all that stuff. You can't be having that stuff degrade.

Tracy Alloway (3:03)

Well, the other interesting thing that's happening in the space now. So in addition to the physical challenge of building a bunch of this stuff, there's also the financial aspect of it. And I guess as AI becomes more and more of a thing, and clearly as you laid out, there's a lot of enthusiasm around the space at the moment, you are seeing a bunch of financial entities get interested as well. So obviously venture capital has been pouring money into the space, but we're starting to see some new types of financial investments in AI. And I'm thinking about one thing in particular, and it is the recent GPU or chip backed loan that was reported by the Wall Street Journal.

And I think we should talk about that aspect of it too.

Joe Weisenthal (3:48)

Totally, because one of the things that's happening in tech is this big sort of shift from like, okay, where all of your costs in the past, or a lot of them are sort of OPEX, the cost of engineers, et cetera.

And now suddenly tech companies have to think about CAPEX for the first time. These big upfront costs that are in theory gonna pay off for a long time, which in theory then changes how you should think about the financing model.

Tracy Alloway (4:11)

Absolutely.

Joe Weisenthal (4:12)

Well, I am excited to say, because we literally do have the perfect guest. We're gonna be speaking with Brian Venturo. He is the Chief Strategy Officer at CoreWeave.

CoreWeave, for those who don't know, it's probably the company right now that people most associate with being at the heart of the AI data center boom. They have a bunch of Nvidia chips. They have investments from Nvidia right here in the sweet spot. As you mentioned, one of the interesting things that's going on is they not long ago announced a debt financing facility sit back basically by the GPUs that they would acquire.