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Corweave has a one year pay back on their AI investments and then it's almost pure profit. They only build contracts that support a one year payback. This just shows how high the return on AI investment is right now. In business a one year pay back is almost unheard of. It will be interesting to see how long the AI market stays this hot, a one year pay back is almost unheard of in capital expenditures. (this morning on CNBC)
Is it really quite that simple ? Quite by chance, my son showed me a YouTube video a couple of hours ago about some hot new US finance thing called "private credit" which just happened to mention CoreWeave running into difficulty with interest payments on the non-bank loans it used to buy nVidia GPUs.
Then I read this in the latest company financial update:
"Both CoreWeave's CEO and CFO, Michael Intrator and Nitin Agrawal, respectively, were keen to focus on the company's "adjusted operating income" as an indicator of profit."
"Adjusted" to exclude intest payments in this case. A collosal adjustment.
But I'm just an old school engineer who gets rather sceptical when newbies rock up claiming that the standard measurement techniques (profit and loss accounting in this case), somehow "aren't appropriate" for their "very special circumstances".
