CoreWeave is changing the way it finances the AI boom, according to its third-quarter earnings report released Tuesday. The neocloud—which rents out the computing power that powers AI—says it is increasingly asking customers to pay in advance, borrowing against specific contracts, and even pursuing short-term deals that could lead to higher prices. These new strategies could help CoreWeave finance its growth more efficiently while extracting more cash from existing infrastructure. But those bets only pay off if today's demand and pricing power hold steady.

CoreWeave reported $3.66 billion in revenue, up 168% from the prior year, but it also posted a $709 million net loss and $846 million in quarterly interest expense. "We will not use the unsecured debt market to fund our business at current yields, nor do we need to," CEO Michael Intrator said during Tuesday's earnings call.

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Instead, CoreWeave plans to rely on loans backed by specific customer contracts, drawing on funds as needed to finance most of the infrastructure it still has to build in order to deliver on its substantial backlog of $132.5 billion. CoreWeave also said it expects roughly $9 billion in customer prepayments and deposits over the next three months, including more than $3 billion tied to signing new customer contracts for capacity it has already built—which requires no additional spending on hardware. Rivals Nebius and IREN have likewise leaned on hefty Microsoft prepayments to pay for computing capacity, a signal that the industry is shifting toward asking Big Tech to pay up for their buildouts.

Upfront payments could ease CoreWeave's immediate borrowing needs, but they also commit the company to providing services at a price that might look less attractive down the road if compute demand keeps surging. CoreWeave is also looking to capitalize on that growing demand by signing more short-term contracts that can command much higher prices. The company raised prices across its offerings by about 25% in July and by another 10% later in the quarter. Prices are still climbing this quarter in a way that "more than offset[s] cost increases," Intrator said.

"We are also allocating more capacity to short-term opportunities, where the pricing justifies it, selling capacity at more than $40 million per megawatt annually, while pricing for new infrastructure on four and five-year contracts is moving to $20 million to $25 million per megawatt," the chief executive said.

CoreWeave's financing strategy now revolves around those opportunities. In August, the company closed a $2.6 billion loan—its first designed specifically for shorter-term customer contracts. Known as DDTL 5.5, it lets CoreWeave borrow in installments as it needs the money. While short-term deals let CoreWeave charge higher prices and adjust them more frequently, there is a tradeoff. Lenders give more weight to longer-term contracts, even if priced lower, because they value predictable cash flow and consistency in repaying the loan above all else.

Even though Wall Street reacted positively to CoreWeave's earnings, bond investors are far less sanguine. Last month, yields on some of the company's bonds climbed above 15%, underscoring investor concern about the debt needed to fund data center buildouts before those investments generate a return.

In short, CoreWeave is finding new ways to expand without relying on unsecured debt. The strategy it has chosen could boost profits, but it also carries greater risk around contract renewals and pricing—and it illustrates just how dependent the AI infrastructure boom is on sustained, and as yet unproven, demand.