CoreWeave NASDAQ:CRWV shares fell nearly 14% on Wednesday after a report said Meta Platforms (META) is developing a cloud infrastructure business that could compete with providers offering artificial intelligence computing services.
The report said Meta is building a business that would sell excess AI computing capacity and provide outside customers access to AI models hosted on its infrastructure. The initiative could position the company as a competitor to emerging AI cloud providers, including CoreWeave.
The development drew investor attention because Meta is one of CoreWeave's largest customers. Earlier this year, the companies entered into a $21 billion AI infrastructure agreement, making Meta a key contributor to CoreWeave's customer base. Investors appeared concerned that Meta's expanded cloud ambitions could eventually reduce its reliance on third-party AI infrastructure providers.
While Meta has not outlined a timeline for the reported cloud business, the move signals intensifying competition in the rapidly expanding AI infrastructure market as technology companies seek to monetize growing demand for computing capacity.