CRWV has high debt risk due to massive capex ($14B) vs low op cash flow ($3.6B) and a weak balance sheet (3:1 short-term debt to cash ratio).

Is Sam Altman right about the unsustainability of Neo Clouds? The best way to analyze this is to look at CoreWeave's financial data, which we will do in a few moments.

However, this will be the last time a lifetime subscription is available. So, how does this circular nature work ? What do we actually see at CoreWeave? What's happening with companies like Cudo?

Good. The idea is simply for a company like CoreWeave to say: "We will build the infrastructure, and the customers will come." They are building a huge amount of processing capacity.

If they can only lease a portion and cannot lease their full capacity, they will not need to buy more Nvidia chips.

Then they will end up going to Nvidia and saying, "Look, we need you to take care of this." "We need you to do something about this."

They say Coreweave is the best buy in the modern cloud space right now. They are making some logical points here. They say it is trading at only 2.2 times its revenue. There is an opportunity for risk-tolerant investors looking to bet on the AI boom.

We have $12.9 billion in revenue projected for this year. This is equivalent to four times the revenue of Nebius, and four times what iRent provides. We have 1.5 GW of active power and another 3.7 GW under contract.

Okay , that's fine. So, we have a lot of enthusiasm directed towards Coreweave, but they argue that it is discounted because of the risks of customer concentration, particularly Microsoft, which has now begun to purchase its own computing capabilities.

So, is there a risk that if Meta and OpenAI produce their own "Jalapeno" chips , and Meta and Microsoft buy their own hardware, they might not need CoreWeave? Is this the real danger?

They believe that CoreWeave is working on diversifying its clientele. They have a company called "Gane Street" to sell to. Hey, there are lots of people who will rent this capacity. And that may be true .

But I actually think there's a bigger story going on here. Because we somehow have to take into account that those data centers may need to be repurchased by Nvidia.

But if there is a surplus of computing, why are CoreWeave or OpenAI buying Mac Ultras , while at the same time CoreWeave is trading at a discount?

I think what's happening is that the divergence of artificial intelligence is splitting it into two different chip components. You specifically have enterprise inference chips, and then you have advanced model inference chips.

This may explain the likely stock market movement we are witnessing today.

And of course, CoreWeave, which the information claims is a purchase deal, but you find people like Sam Altman criticizing it, saying, "I don't know, man." They may become a bit speculative in their expansion."

So , when you look at CoreWeave , the majority of their chips, at least based on public files and reports on the subject, are expected to be advanced training-type chips. Yes, they are moving on to reasoning.

They are moving to the RTX 6000. They moved to that last year. The projections indicate that this exposure is very low . The reasoning of institutions is the following limit.

But if you're stuck with a lot of advanced data center chips , is there a debt risk putting pressure on a company like CoreWeave? Personally, when I look at CoreWeave's financial data, I think the answer is yes.

We don't need to know that they are technically losing money. This is already old news. If you add depreciation again, they make money. But this is a return on investment from their cash flows, as they spend huge sums on capital expenditures.

They are spending $14 billion against $3.6 billion in operating cash flow . So they clearly need to borrow or raise money, which is exactly what they are doing. Help yourself. They spent $14 billion on capital expenditures.

They raised $3 billion in equity and $11 billion net in financing.

Good. Companies do this. They are trying to expand. They are trying to invest. But the problem with Coreweave is that its balance sheet is not very good. Their balance sheet, compared to a company like Enphase, is really weak.

Coreweave, on the other hand, has $5.5 billion in cash against $18 billion in invoices. They have $3 of short-term debt for every $1 in cash they have . This is not good. This slows expansion and makes funding more difficult, especially if Sam Altman suggests: "Hey, maybe we're starting to overdo it a bit with the level of leading-edge computing."