The artificial intelligence cloud computing company CoreWeave takes a cue from Wall Street strategies to hedge against memory chip price risks.

According to a source familiar with the matter, artificial intelligence cloud computing company CoreWeave is exploring the use of financial derivatives as a potential hedge against future drops in memory and storage chip prices. This unusual move highlights how the AI boom is deeply tied to the volatile chip market for cloud service providers. To secure supply amidst surging demand for AI infrastructure construction, cloud operators including CoreWeave have signed long-term agreements with memory and storage chip manufacturers such as Micron and SanDisk. Many of these agreements provide suppliers with price floor protection for dynamic random access memory and storage chips. According to sources, CoreWeave executives have discussed how to hedge against the potential devaluation risk of memory chip inventory due to future price drops. The source said that the discussions are still in the early stages and the company has not yet executed any hedging operations. Possible solutions being discussed include put options - contracts that give the holder the right to sell the underlying asset at a predetermined price in the future - and other potential derivative tools.