"It's Nonsense Being Pushed by Short Sellers." - CoreWeave CEO on the GPU Depreciation Debate
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Episode Description
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Brief Summary
The episode argues against GPU obsolescence, emphasizing long-term contracts and a six-year depreciation model for technology.
Key points
- GPU Depreciation Debate. A debate on GPU depreciation is being fueled by traders with short positions.
Transcript
What is the shelf life of a 100 right now? That's been a big debate for your company, for Microsoft and I guess Michael Bur who you must have known when you were a quant saying, "Oh my god, the whole industry is the sky's falling." My take on the GPU depreciation debate is that it's nonsense. It's a debate that is being brought to the forefront by some traders that have a short position in the stock and they're trying to uh talk down. Look, here's what we know. When we buy infrastructure, we're a success based company, right? We're a small company on a relative basis compared to the enormous companies that we're competing with. And so our clients
come into us and they buy compute for 5 years, for 6 years. Our average contract is 5 years. So any commentary by anyone either inside or outside of the industry that this stuff becomes obsolete in 16 months or whatever nonsense they're spewing, it doesn't in any way match up with the facts on the ground. The facts on the ground is they're buying it for 5 years. And my approach to this has always been if people are willing to pay me for it, it still has value. >> Correct. >> Pretty simple way of of approaching it. We use a six-year depreciation. We
believe that the GPUs will last in excess of 6 years, but we felt like that was a fair and reasonable approach to a technology cycle that's moving at this velocity.
