CoreWeave shares plunge as Meta may turn competitor

Shares of AI cloud infrastructure company CoreWeave fell sharply this week, losing over $7.5 billion in market value, following a report that a major customer may become a competitor. The stock dropped 13.9% on Wednesday, July 1, and fell another 5.5% on Thursday, July 2, closing at $80.97.

The sell-off was triggered by a Bloomberg report indicating that Meta Platforms is exploring a plan to sell its excess artificial intelligence computing capacity to outside companies. This would potentially place Meta, one of CoreWeave's largest customers, in direct competition within the specialized "neocloud" market CoreWeave occupies. Meta's shares rose on the news, while CoreWeave and fellow neocloud provider Nebius saw significant declines.

CoreWeave responded to the report by stating it continues to see strong demand across a growing and diverse customer base, including Meta, which it described as a great partner. The company framed the broader AI investment wave as a rapidly expanding market rather than a zero-sum game.

Adding to the competitive pressure, SoftBank announced on Thursday its plans to launch a U.S. AI cloud business tentatively called SB Neo. This represents another...