CoreWeave reversed course to gain around three percent after the AI cloud firm announced an expanded deal with OpenAI of up to $4 billion, lifting investor sentiment that had taken a hit from the company's hefty capital spending plans.

CoreWeave stated in a regulatory filing that OpenAI has pledged to compensate the Nvidia-supported data center operator until April 2029.

CoreWeave executives mentioned during a post-earnings call that they had finalized an expansion agreement, although they did not disclose the company's name. They also mentioned that CoreWeave had secured a new hyperscaler as a customer without providing additional information.

OpenAI and CoreWeave currently hold a five-year agreement valued at $11.9 billion, in which the New Jersey-based company supplies cloud computing resources to the ChatGPT creator. The agreement also provided OpenAI with an interest in CoreWeave.

Although CoreWeave did not reveal the identity of its hyperscaler client, analysts from Morgan Stanley and MoffettNathanson suggested it may be Alphabet, Google’s parent company. An April media report indicated that Google was negotiating to lease Nvidia chips from CoreWeave.

CoreWeave's stock dropped by as much as 9.1 percent earlier after the company estimated its yearly capital expenditure would be nearly four times greater than the expected revenue for 2025. The forecast was made in CoreWeave's initial earnings report since becoming public in March.

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Hyperscalers are direct rivals of CoreWeave and are only utilizing CoreWeave temporarily for excess capacity.

"They will probably disappear after establishing a sufficient number of their data centers," states analyst Gil Luria from D.A. Davidson & Co.