AI cloud provider CoreWeave reportedly considers using financial derivatives. These include put options. This strategy would hedge against potential future declines in memory and storage chip prices. CoreWeave is a major buyer of semiconductors. It has entered long-term supply agreements with manufacturers like Micron and SanDisk. These agreements secure chips for its AI infrastructure.
These long-term contracts often include price floors. Price floors protect chipmakers from downturns. However, they expose CoreWeave to the risk of paying above-market rates if chip prices fall. Discussions about using derivatives remain in early stages. No trades have been executed. This strategy represents an unconventional application of Wall Street-style commodity hedging to the volatile semiconductor market.