They started as scrappy crypto miners in a Manhattan office that literally overheated, hauling GPUs out to a ventilated garage when the machines turned the sixth floor into an inferno — an origin story that should remind Americans that great companies often begin with grit, not handouts. What followed was a ruthless pivot from mining to renting Nvidia’s most powerful chips to the AI elite, and a leader, Michael Intrator, who learned to move fast and bet everything on compute.
That bet was bought almost entirely with borrowed money, the kind of debt Wall Street loves to package and sell when the narrative is shiny enough — from huge private credit rounds led by Blackstone to a parade of credit facilities designed to buy more GPUs and build more data centers. The result is a company loaded with multi‑billion dollar loans and financing covenants that have already required waivers, showing how fragile a model can be when it’s powered more by leverage than by sustained profits.
CoreWeave points to blockbuster contracts as proof the strategy works: massive, multi‑year deals with Microsoft and an expanded agreement with OpenAI that swell its revenue backlog into the double digits of billions. Those headline deals explain why investors keep funding the push for more capacity, but they also concentrate risk into a few customers — a classic tale of high reward tethered to high vulnerability.
Then there’s the cozy safety net from the very suppliers and partners that helped the company boom. Nvidia agreed to buy unsold compute capacity under a multi‑billion dollar arrangement that reads less like a pure commercial deal and more like corporate life support, insulating CoreWeave’s balance sheet from one of the main dangers of this business: empty racks and unpaid leases. That kind of backstop raises serious questions about market distortion and favoritism in an industry that should live or die by competition, not by sweetheart guarantees.
When CoreWeave went public in March, its IPO and subsequent market moves were propped up by strategic investors and underwriters, and even Nvidia stepped in during delicate moments — signals that the market was as much being managed as it was being earned. The company’s stock surge and headline valuations are impressive on paper, but the underlying math still shows heavy interest burdens and aggressive capital plans that assume perfect demand for years to come.
Conservatives should admire the entrepreneurial daring, but we must call out leveraged speculation for what it is: a dangerous gamble that concentrates upside for a few while socializing downside across creditors and the broader market. This is not free market heroism; it’s a financial construct engineered by clever financiers and powerful tech partners that may unravel if growth slows or interest costs bite. The freedom to fail is essential in capitalism, but so is the responsibility to not build systemic risks into national infrastructure.
Shareholder pushback against CoreWeave’s proposed deals, like its contentious bid for Core Scientific, shows that investors are starting to demand better terms and transparency rather than just another transformative PowerPoint. That dissent is healthy and necessary — markets work when boards answer uncomfortable questions, not when they rubber‑stamp audacious expansions without laying bare the contingencies.
At bottom, this story is a warning to everyone who cheers uncritically for hype. Bold companies deserve capital, but not at the cost of common sense or honest accounting. If markets, regulators, and investors insist on scrutiny and sobriety, we’ll keep encouraging real innovation while preventing another debt‑fueled boom from turning into a taxpayer or pensioner bailout when the music stops.
