CoreWeave Inks Deal to Power Perplexity’s AI

AI cloud provider CoreWeave has inked a multi-year deal with Perplexity AI, providing dedicated Nvidia Grace Blackwell-powered clusters for the AI answer engine’s inference workloads. This partnership highlights the intense demand for specialized AI compute infrastructure while CoreWeave navigates rapid expansion and significant capital expenditures, reflecting a dynamic yet challenging market for AI upstarts.

Key Points

• CoreWeave signed a multi-year deal to power Perplexity’s AI inference using Nvidia Grace Blackwell clusters.
• CoreWeave’s revenue more than doubled to $1.57 billion but net losses reached $284 million in Q4.
• The company’s revenue backlog swelled to $66.8 billion as it plans to double capital expenses.
• Fears about AI impacting human coding jobs have sent GitLab shares down approximately 60% over the past year.

CoreWeave Fuels Perplexity’s AI Ambitions

The specialized AI cloud provider CoreWeave announced a multi-year strategic partnership with Perplexity AI, the increasingly popular AI answer engine. Under the agreement, CoreWeave will provide its compute infrastructure, specifically dedicated Nvidia Grace Blackwell-powered clusters, to support Perplexity’s AI inference workloads . This move is critical for Perplexity as it scales its operations, requiring robust and specialized hardware to deliver quick, accurate responses.

CoreWeave’s CEO, Mike Intrator, emphasized that this partnership reflects a broader trend of emerging AI leaders adopting their platform. “Like many others, they choose us for our unified AI cloud platform — not just access to capacity — and that is building a more diversified CoreWeave business,” Intrator stated. Perplexity cited performance as a key driver behind its decision to select CoreWeave, indicating the importance of optimized infrastructure for cutting-edge AI services. The deal also includes CoreWeave adopting Perplexity Enterprise Max, enabling its workforce to search across web and internal documents.

This announcement comes as CoreWeave navigates significant growth alongside increasing financial demands. The company reported a substantial increase in revenue, which more than doubled year-over-year in the fourth quarter, reaching$1.57 billion. Its revenue backlog also surged to $66.8 billion by the end of December. However, this aggressive expansion comes with a cost: CoreWeave’s net losses ballooned to $284 million in the fourth quarter, up from $36 million in the same period last year. The company anticipates its capital expenses to double as it scales its AI cloud platform to meet the enormous computing power required for training and deploying advanced AI models.

The Shifting Tides for Software Development

While AI infrastructure providers like CoreWeave are thriving on demand, other sectors of the tech industry are grappling with the implications of advanced AI. Shares of software development service GitLab (GTLB) tumbled significantly following lackluster guidance, contributing to a roughly 60% decline in its stock price over the last year. This downturn is largely attributed to a “death-of-human-coding” narrative taking hold among investors.

The core concern is that GitLab sells tools and services traditionally used by human coders and developers. With rapid advancements in AI coding, exemplified by programs such as Claude Code, investors fear a future with significantly fewer human programmers requiring these services. Further compounding this anxiety, a report from The Information indicates that OpenAI is developing an alternative to Microsoft’s GitHub, which, like GitLab, offers code repositories and collaborative software development tools. While the complete obsolescence of human coders isn’t a foregone conclusion, the perceived reduction in demand for their numbers is reshaping investment in companies that serve them.

AI’s Intricate Dance with Government and Defense

The integration of AI into critical national infrastructure and defense systems is also creating complex dynamics. Palantir Technologies (PLTR), a major government contractor known for its data analysis software, may face strained ties with AI lab Anthropic. This potential separation stems from an order by Defense Secretary Pete Hegseth, who reportedly declared that his department would restrict military contractors from using Anthropic’s technology. Anthropic’s AI models are deeply embedded within the Palantir software packages utilized by the U.S. government for analyzing classified data, making this a significant operational challenge.

Alex Karp, CEO of Palantir, recently criticized what he perceived as Silicon Valley’s resistance to supporting the U.S. military. Speaking at a defense tech summit, Karp warned that AI companies going against the military risk angering both liberals and conservatives, potentially leading to the nationalization of their technology. “If Silicon Valley believes we are going to take everyone’s white-collar jobs… and you’re going to screw the military, if you don’t think that’s going to lead to the nationalization of our technology, you’re retarded,” Karp reportedly said, emphasizing the precarious position of tech companies in the defense sector.

Broader Market Movements: Retail and Crypto Rebounds

Beyond the immediate AI narrative, other market segments show divergent trends. Off-price retailer Ross Stores (ROST) saw its shares climb over 6% after reporting stronger-than-expected fourth-quarter sales. The company posted adjusted earnings of $2 per share, surpassing Wall Street expectations of $1.90, with total sales increasing 12% year-over-year to $6.6 billion. CEO Jim Conroy attributed some of this success to growth among 18- to 34-year-old customers.

Meanwhile, crypto-adjacent stocks experienced a rebound as Bitcoin soared above $70,000, exceeding a key resistance area. Companies like Strategy and Strive Inc., MARA Holdings, Riot Platforms, Coinbase (COIN), and Robinhood Markets (HOOD) all saw gains. This rally coincides with a broader market reversal influenced by heightened geopolitical risk, suggesting a rotation into different asset classes after Bitcoin’s challenging performance earlier in 2026, when it was down nearly 50% from its October peak.

Frequently Asked Questions

What type of AI computing will CoreWeave provide to Perplexity?

CoreWeave will provide dedicated Nvidia Grace Blackwell-powered clusters specifically optimized for Perplexity’s AI inference workloads, which involve running trained AI models to generate predictions or responses.

How has CoreWeave’s financial performance been recently?

CoreWeave saw its revenue more than double to $1.57 billion in the fourth quarter and has a substantial revenue backlog of $66.8 billion. However, the company also reported net losses of $284 million for the quarter, reflecting high capital expenses for rapid scaling.

Why are investors concerned about GitLab’s future?

Investors are worried that rapid advancements in AI coding tools, such as Claude Code and potential OpenAI alternatives to GitHub, will reduce the future demand for human software developers, thereby impacting companies like GitLab that provide services for these professionals.

What is the potential issue between Palantir and Anthropic?

Palantir’s use of Anthropic’s AI models in government contracts is at risk because the Defense Secretary has reportedly indicated restrictions on military contractors using Anthropic’s technology, potentially forcing Palantir to sever ties.

What This Means For You

• For AI Developers and Founders: The CoreWeave-Perplexity deal underscores the critical importance of specialized AI infrastructure. If your application relies on high-performance inference, consider dedicated GPU clusters like those offered by CoreWeave using Nvidia Grace Blackwell, as performance was a key factor for Perplexity. Be prepared for significant capital expenditure if you’re building out similar capabilities, given CoreWeave’s own ballooning losses despite revenue growth.
• For Software Developers: The downturn in GitLab shares and the “death-of-human-coding” narrative highlight a critical shift. While not an immediate end to coding jobs, understand that AI tools are becoming increasingly sophisticated. Focusing on higher-level problem-solving, AI tool integration, and specialized areas where human creativity remains paramount will be crucial for career longevity.
• For Tech Investors: The market is bifurcating. Investigate companies deeply rooted in providing foundational AI compute like CoreWeave, but scrutinize their balance sheets for rising losses and capex demands. Simultaneously, be cautious with traditional software development tool providers until a clearer picture emerges regarding AI’s long-term impact on the developer workforce. Consider the resilience of diversified revenue streams like CoreWeave’s growing backlog versus exposure to single-market narratives.
• For Government Contractors and AI Labs: Alex Karp’s strong comments regarding Silicon Valley’s relationship with the U.S. military signal a growing tension. If you’re an AI company seeking government contracts, align your strategy with defense needs and be prepared for potential regulatory restrictions on technology usage, as seen with Anthropic and the Pentagon.