overheating

The report says 10 small, ocean-dependent nations will experience the biggest increase in dangerous heat days, despite collectively producing only 1 percent of global heat-trapping gases.

A new study by World Weather Attribution and United States-based Climate Central has calculated the increase in dangerous “superhot days” – defined as warmer than 90 percent of comparable days between 1991 and 2020 – due to climate change.

The report, which is not yet peer-reviewed but uses established techniques for climate attribution, was released on Thursday. It highlights the significant effect of the Paris Climate Agreement.

Before the 2015 accord, the world was on track for a catastrophic 4C (7.2F) of warming by the end of the century, which would have resulted in an additional 114 superhot days per year.

By fulfilling current commitments to curb emissions, the world is now heading towards 2.6C (4.7F) of warming. Under this scenario, the Earth will still add 57 superhot days annually by 2100 – nearly two months of dangerously high temperatures – but this is half the increase of the worst-case scenario. Since 2015, the world has already added 11 superhot days on average.

Potsdam Climate Institute Director Johan Rockstrom, who was not part of the research team, said people should not be relieved that we are no longer on the 4-degree warming pre-Paris trajectory because the current track “would still imply a disastrous future for billions of humans on Earth”.

The report does not say how many people will be affected by the additional dangerously hot days, but coauthor Friederike Otto of Imperial College London said “it will definitely be tens of thousands or millions, not less”. She noted that thousands die in heatwaves each year already.

The study also underscores the profound unfairness of the impact of climate change across the world, showing a massive disconnect between carbon pollution and expected heat exposure.

The 10 countries that will experience the biggest increase in dangerous heat days are almost all small, ocean-dependent nations like Panama, the Solomon Islands, and Samoa. These countries are expected to see the largest spikes, with Panama projected to face 149 extra superhot days a year. These 10 nations collectively produce only 1 percent of global heat-trapping gases.

In stark contrast, the top carbon-polluting countries – the United States, China, and India – are predicted to get only between 23 and 30 extra superhot days. Despite being responsible for 42 percent of the world’s carbon dioxide, they will face less than 1 percent of the additional superhot days.

University of Victoria climate scientist Andrew Weaver, who was not part of the study team, said this heat inequality drives “yet another wedge between have and have-not nations”, potentially sowing seeds of geopolitical instability.

Few stocks are as directly exposed to artificial intelligence as CoreWeave (CRWV 0.72%). The AI cloud infrastructure company reinvented itself, transitioning from a crypto mining company by repurposing its GPUs to provide AI computing power to customers like Microsoft, Nvidia, and OpenAI.

With the AI boom in full swing, that business model has led to jaw-dropping growth. In its second quarter, its revenue jumped 206% to $1.21 billion, showing how fast demand for its services is ramping up.

Now, CoreWeave just got another shot in the arm as the stock jumped 12% on Tuesday after announcing another blockbuster deal, this time with Meta Platforms (META 1.35%).

Image source: Getty Images.

What’s happening with CoreWeave and Meta?

Meta is committing to spend up to $14.2 billion through 2032 on cloud computing capacity from CoreWeave, with an option to expand its commitment.

The deal comes at a time when Meta has been ramping up its spending on AI, seeing it as a must-win for its future. In June, Meta acquired a 49% stake in Scale AI, a data-labeling start-up, and poached its CEO, Alexandr Wang, to run its new AI lab.

On the same day that the CoreWeave news came out, Meta also announced that it’s buying the chip start-up Rivos, which designs chips based on RISC-V architecture, an alternative to those used by leading CPU architecture designers Arm, Intel, and AMD. Rivos is also expected to help Meta build out full-stack AI systems.

For CoreWeave, the deal builds on the earlier momentum it earned when it signed an expanded $6.5 billion agreement with OpenAI in September, bringing its total contract with OpenAI to $22.4 billion.

The drumbeat of positive news for AI includes rival Nebius’s $17 billion deal with Microsoft, Oracle’s huge cloud computing forecast, and CoreWeave’s own wins, including OpenAI, Meta, and a $6.3 billion deal with Nvidia, in which it will buy any of CoreWeave’s unused capacity, effectively backstopping the company’s growth.

Those news items, and improving sentiment around CoreWeave, sparked a recovery in the stock last month. After falling by more than 50% from its peak in June, CoreWeave jumped more than 50% off its lows early in September.

Is CoreWeave overvalued?

CoreWeave is a challenging stock to value. The company is delivering phenomenal top-line growth, but it’s also reporting huge losses. The company’s business model is risky. It’s borrowing billions of dollars to buy Nvidia GPUs and build out the infrastructure to provide next-generation AI computing.

That high-interest debt has also led CoreWeave to pay significant interest expense, set to be above $1 billion this year, essentially preventing CoreWeave from turning a profit.

For most stocks, to determine an appropriate valuation, you just look at the numbers. However, CoreWeave is in a class of its own. Given its growth rate, in which revenue is still tripling, the upside potential for the stock is tremendous, and conventional cloud computing businesses like Amazon Web Services and Microsoft Azure have shown how profitable cloud computing can be at scale.

Rather than parsing the numbers for CoreWeave to determine whether the stock is overvalued, investors are better off considering the future of the AI boom. If the massive capex buildout continues, including on CoreWeave’s infrastructure, the stock is a good bet to be a winner. At a market cap of $66 billion, the stock still has room to move higher.

However, if the AI boom turns into a bubble and spending suddenly slows, CoreWeave is likely to plunge. While it’s locked in multi-billion-dollar deals with the likes of Meta, the company will need more of those to turn profitable and justify its current valuation.

Either way, expect the volatility in the stock to continue.