CoreWeave and Nebius shares fell sharply after reports Meta may enter the AI cloud computing market, threatening key customer relationships.
Shares of AI cloud providers CoreWeave and Nebius dropped 14% and 17% respectively after reports Meta Platforms plans to sell AI computing power. The move could turn a major customer into a direct competitor, raising concerns over future demand for third-party services.
CoreWeave, which disclosed a $21 billion commitment from Meta, saw its stock fall to $85.68, down 48% from its 52-week high. Nebius, with a $27 billion agreement with Meta, declined to $229.18, a 24% drop from its peak. Both companies rely heavily on Meta for revenue, making the shift particularly impactful.
The sell-off reflects broader worries about competition in the AI cloud sector. CoreWeave reported $2.08 billion in first-quarter revenue, up 112% year-over-year, with a $99.4 billion revenue backlog. However, its debt levels remain a concern for investors.