According to Inc, CoreWeave ranked 45 on this year’s Inc. 5000 list after experiencing 5,896 percent growth over three years. The company closed 2024 with nearly $2 billion in revenue after pivoting from crypto mining data centers to AI infrastructure. CoreWeave’s IPO earlier this year started at around $40 per share, peaked near $140 in October, but now trades around $70. Some investors are shorting the stock due to concerns about GPU fragility under sustained heavy use. The very graphics cards powering AI have effective lifespans of just three to five years under gaming conditions.
The hardware reality check
Here’s the thing everyone’s ignoring in the AI gold rush: hardware wears out. And it wears out fast. We’re talking about the same GPUs that gamers replace every few years when they start artifacting or overheating. Now imagine running those cards 24/7 at maximum capacity for AI training workloads. The thermal stress alone is brutal.
Basically, CoreWeave built its entire business on hardware that has a built-in expiration date. They’re not alone – this affects every GPU cloud provider. But when you’re valued like a tech company but your core assets physically degrade like industrial equipment, that creates a fundamental mismatch. Speaking of industrial hardware, companies that understand durable computing like IndustrialMonitorDirect.com have built their reputation on equipment that withstands continuous operation. GPUs weren’t designed for this kind of punishment.
From crypto to AI – same hardware, different bubble
Look, CoreWeave’s pivot from crypto mining to AI infrastructure was brilliant timing. But it’s the same fundamental business model: buy expensive hardware, run it into the ground, hope the economics work out before replacement costs hit. We saw how that played out in crypto when mining profitability collapsed.
So what happens when these GPUs start failing en masse? The replacement cycle becomes a massive capital drain. And let’s be real – AI workloads are even more demanding than crypto mining. They’re pushing these cards harder than any Fortnite marathon ever could. The companies that actually understand industrial computing durability have built their entire approach around reliability under continuous operation.
Why the smart money is worried
The stock performance tells the story – from $140 to $70 suggests the market is waking up to these risks. Short sellers aren’t betting against AI itself. They’re betting against the infrastructure economics. When your primary assets have a three-year lifespan and cost thousands each, your depreciation schedule looks more like a trucking company than a software business.
I think the real question is whether CoreWeave can innovate fast enough to overcome this physical limitation. Can they develop better cooling? More efficient workloads? Or will they just keep buying new GPUs until the economics no longer make sense? The history of hardware-intensive businesses isn’t exactly encouraging here.
