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# What Is a Take-or-Pay GPU Contract? Offtake That Bills Idle Hours
- URL: https://www.sotkn.com/explained/take-or-pay-gpu-contracts-explained/
- Published: 2026-09-29T01:09:38.000Z
- Updated: 2026-09-29T01:10:02.000Z
- Description: A take-or-pay GPU contract is a committed offtake for reserved accelerator capacity: the customer pays for the booked cluster whether or not every hour is used, and the operator can only start that bill once the contracted capacity is delivered.
- Author: Sean
- Tags: #desk-explained, Mechanism

EXPLAINED · Mechanism · Last reviewed: 29 Sep 2026 · Next review: after CoreWeave Q3 2026 results print take-or-pay mix and backlog conversion

A take-or-pay GPU contract is a committed offtake for reserved accelerator capacity: the customer pays for the booked cluster whether or not every hour is used, and the operator can only start that bill once the contracted capacity is delivered.

**In short.** Take-or-pay is how the [neoclouds](https://www.sotkn.com/stack/neoclouds/) layer turns a signature into a cash clock. The stuck step is still delivery — energised megawatts and accepted GPUs — not the offtake print. Idle hours after start still bill. Undelivered hours do not.

Who gets paid when AI labs lock capacity instead of buying silicon, and which clock you are watching — the commitment, the hall, or the recognised hour. Compare the seller in [what a neocloud is](https://www.sotkn.com/explained/neocloud-explained/), the billed unit in [GPU as a service](https://www.sotkn.com/explained/gpu-as-a-service-explained/), and the accounting remainder in [remaining performance obligation](https://www.sotkn.com/explained/remaining-performance-obligation-explained/).

## What is a take-or-pay GPU contract?

Take-or-pay is a commercial form, not a chip. The customer commits to a block of GPU capacity for a term. After the operator delivers that block, the customer pays the reserved fee even if utilisation is low. On-demand is the opposite shape: pay only for hours started.

CoreWeave’s Q2 2026 10-Q states the split in one sentence: it sells access “either through committed contracts, which are take-or-pay, or on-demand, which are pay-as-you-go.” Committed contracts “generally have a predetermined term and start either on a fixed date or when we deliver the capacity specified in the contract” (Form 10-Q, period ended 30 Jun 2026). Delivery is the on-switch. The take-or-pay clause is what happens after that switch.

The same filing says revenue from customer commitments — including capacity delivered before a commitment start date — was **98%** of total revenue for the three months ended 30 June 2026 (and 98% for the six months). On-demand is the margin of the book, not the book.

| Shape                              | What the customer buys | When the bill starts                                         | If the cluster sits idle               |
| ---------------------------------- | ---------------------- | ------------------------------------------------------------ | -------------------------------------- |
| On-demand / pay-as-you-go          | Hours started          | When the instance runs                                       | Little or nothing                      |
| Reserved / committed (take-or-pay) | Access for a term      | On a fixed date **or** when contracted capacity is delivered | The reserved fee still bills           |
| Prepay on a committed contract     | Cash before access     | Cash in; revenue later                                       | Deferred revenue, not a cancelled bill |

[GPU as a service](https://www.sotkn.com/explained/gpu-as-a-service-explained/) is the hour. Take-or-pay is the offtake wrapper around a large block of those hours. A [neocloud](https://www.sotkn.com/explained/neocloud-explained/) lives on that wrapper. A [hyperscaler](https://www.sotkn.com/explained/hyperscaler-explained/) can sit on either side: selling committed cloud, or buying take-or-pay capacity from a specialist.

## Why does take-or-pay bind?

It relocates demand risk. Before the clause, an unsold GPU-hour is the operator’s problem. After delivery under take-or-pay, an unused hour is the customer’s problem — until the customer stops paying.

That is why lenders will fund GPUs against contracted cash flows, and why a neocloud can print a large backlog while still losing money on interest and depreciation. CoreWeave’s Q2 2026 release is the dated seller print: revenue **US$2.575 billion**, revenue backlog approximately **US$104 billion** as of 30 June 2026, active power **1.5 GW**, contracted power about **3.7 GW** (11 Aug 2026). The 10-Q adds the accounting cut of the same book: remaining performance obligations **US$103.7 billion** as of 30 June 2026.

**Our arithmetic on CoreWeave’s own bands.** Of that US$103.7 billion, 41% was expected over the 24 months ending 30 June 2028, 39% between months 25 and 48, and the rest between months 49 and 78 (10-Q). 41% of 103.7 is about **US$42.5 billion**; 39% is about **US$40.4 billion**; the remaining 20% is about **US$20.7 billion**. Booked is not this year’s GPU line.

**Our arithmetic on the hall clock.** 3.7 ÷ 1.5 = **2.5×**. Contracted power is about two and a half times live power. A take-or-pay signature against a dark hall does not yet bill. See [speed-to-power](https://www.sotkn.com/explained/speed-to-power-explained-for-investors/).

Microsoft’s FY2026 10-K is the dated **buyer** print of the same mechanism. As of 30 June 2026, purchase commitments were **US$194.060 billion**, of which **US$169.008 billion** was due in fiscal 2027 and **US$25.052 billion** thereafter. The footnote: “Purchase commitments primarily relate to datacenters and include open purchase orders and take-or-pay contracts” (Form 10-K, year ended 30 Jun 2026). **Our check:** 169.008 ÷ 194.060 = **87%** of that take-or-pay-and-orders bucket sits in the next fiscal year. The hyperscaler is on the hook for capacity it has promised to take. The neocloud is on the hook to deliver it.

Cash can arrive before the hour. CoreWeave says committed contracts typically include a prepayment before the customer receives access; the weighted-average prepayment across active contracts was **15% to 25% of total contract value** as of 31 December 2025, 2024, and 2023 (10-Q). Deferred revenue was **US$9.7 billion** at 30 June 2026, up from US$8.2 billion at year-end 2025\. **Our check:** 9.7 ÷ 103.7 = about **9%** of the RPO figure was already cash-in as deferred revenue. Prepay is a slice. Take-or-pay is the remainder of the obligation.

Nebius is the sibling funding shape: more cash in before the hall. The Q2 2026 letter said roughly **70%** of deals closed included customer prepayments covering **50–60%** of related capex, with more than US$9 billion of prepayments expected in 2026, about **US$40 billion** of customer commitments, and deferred revenue **US$6.0 billion** at 30 June 2026 (letter and results, 12 Aug 2026). That is still offtake. The mix of prepay versus later invoices is what differs. Stack: [What Does CoreWeave Do?](https://www.sotkn.com/stack/neoclouds/what-does-coreweave-do/) · [What Does Nebius Do?](https://www.sotkn.com/stack/neoclouds/what-does-nebius-do/).

## Who gets paid — and where is the stuck step?

On the neoclouds layer, who gets paid tracks which step has cleared.

| Step          | Who                                                                       | Why it matters                                             |
| ------------- | ------------------------------------------------------------------------- | ---------------------------------------------------------- |
| Offtake       | Customer (hyperscaler, lab, or trading firm)                              | Take-or-pay relocates unused-hour risk after delivery      |
| Stuck step    | Delivery — energised MW, installed GPUs, accepted capacity                | The bill does not start until the contracted block is live |
| Funding       | Lenders and prepaid customers                                             | Contracts and prepay back the GPU purchase                 |
| Upstream feed | Packaging, [HBM](https://www.sotkn.com/explained/hbm-explained/), servers | No finished tray, no block to deliver                      |
| Operator      | Neocloud                                                                  | Gets paid as the term runs — if the customer still pays    |

Cash sticks at the operator once a delivered take-or-pay block is running: 98% committed revenue is that print (CoreWeave 10-Q, Q2 2026). Cash sticks at the customer as prepaid deferred revenue before access. Cash sticks in the hall when contracted power (3.7 GW) still dwarfs active power (1.5 GW). Cash sticks upstream when [CoWoS](https://www.sotkn.com/explained/cowos-explained/) or HBM holds the next tray.

Concentration is part of the bind. The 10-Q names Microsoft and OpenAI as significant customers and records that Jane Street, a private firm, committed approximately **US$6.0 billion** in April 2026\. If a large offtaker does not perform, the operator “may have excess capacity and may remain responsible for expenditures for components, infrastructure, and data center leases and build-outs, as well as related financing” (10-Q). Take-or-pay moves utilisation risk. It does not delete credit risk.

The US market door is where most public neocloud offtake sits: [CoreWeave neocloud contracts](https://www.sotkn.com/markets/us/coreweave-neocloud-contracts/) when the specialist book is the story, and [US speed-to-power](https://www.sotkn.com/markets/us/us-speed-to-power-september-2026/) when the hall waits on watts. China is the other door when domestic hours cannot use the same stack — [China HBM access](https://www.sotkn.com/markets/china/china-hbm-access-september-2026/).

A useful test, not a ticker call: if committed take-or-pay stays near 98% of revenue while active power catches contracted power, the offtake is converting. If the mix shifts toward on-demand, or contracted megawatts keep rising while live megawatts stall, the clause is not yet doing the work the backlog headline implies.

## Common misconceptions

- **People assume take-or-pay means the operator is already paid.** Actually the 10-Q starts the committed term on a date **or** when capacity is delivered. Undelivered take-or-pay is a promise. Deferred revenue is the slice where cash already arrived.
- **People assume take-or-pay is the same as remaining performance obligation.** Actually take-or-pay is the contract form. [RPO](https://www.sotkn.com/explained/remaining-performance-obligation-explained/) is the unsatisfied contracted transaction price. CoreWeave’s \~US$104 billion revenue backlog includes RPO plus other estimated amounts, still “subject to the satisfaction of delivery and availability of service requirements” (Q2 2026 release).
- **People assume take-or-pay is a neocloud-only trick.** Actually Microsoft’s 10-K puts take-or-pay inside datacenter purchase commitments (US$194.060 billion as of 30 Jun 2026). Hyperscalers buy this shape as well as sell cloud.
- **People assume a take-or-pay customer who sits idle pays nothing.** Actually after delivery the reserved fee still bills. That is the point of the clause. On-demand is the shape that bills only running hours.
- **People assume prepay and take-or-pay are the same cash event.** Actually CoreWeave’s 15–25% weighted-average prepayment (year-end 2025) is a deposit on a take-or-pay term. Nebius’s 50–60% capex prepay on most Q2 deals is a heavier cash-in. Both sit on offtake. They are not the same clock.

Not investment advice. Do your own research.

## FAQ

**What is a take-or-pay GPU contract?**  
A take-or-pay GPU contract is a committed offtake for reserved accelerator capacity. After the operator delivers the contracted block, the customer pays the reserved fee even if utilisation is low. On-demand bills only the hours that run.

**How is take-or-pay different from on-demand GPU hours?**  
On-demand is pay-as-you-go. Take-or-pay is a term of reserved access. CoreWeave’s Q2 2026 10-Q says committed contracts are take-or-pay, on-demand is pay-as-you-go, and committed contracts were 98% of revenue in the quarter.

**Is take-or-pay the same as remaining performance obligation?**  
No. Take-or-pay is the contract form. Remaining performance obligation is the unsatisfied contracted transaction price. CoreWeave’s US$103.7 billion RPO as of 30 June 2026 is the accounting remainder of committed work still to perform.

**Why do customers prepay on take-or-pay contracts?**  
Prepay is cash before access. CoreWeave disclosed a 15% to 25% weighted-average prepayment of total contract value as of 31 December 2025\. That cash shows up as deferred revenue until the service is delivered. It does not replace the take-or-pay term.

**Who gets paid when a take-or-pay contract binds?**  
The operator gets paid as the delivered term runs. Lenders get paid from contracted cash flows. Upstream, packaging and HBM get paid when the next tray cannot ship. The stuck step is delivery — energised megawatts and accepted capacity — not the signature.

**Does take-or-pay mean the operator is already paid?**  
No. CoreWeave’s 10-Q starts committed contracts on a fixed date or when specified capacity is delivered. A signature against a dark hall does not yet bill. Deferred revenue is the slice where cash already arrived.

**What would weaken a take-or-pay book?**  
A shift from committed to on-demand mix; an offtaker that does not perform; contracted power that stays far ahead of active power; or packaging and HBM delays that keep the next block from starting. CoreWeave’s own risk factor is that the industry may not keep supporting take-or-pay.

## Related terms

- [Neocloud](https://www.sotkn.com/explained/neocloud-explained/) — specialist seller of accelerator hours, usually on committed offtake.
- [GPU as a service](https://www.sotkn.com/explained/gpu-as-a-service-explained/) — the billed hour; take-or-pay is the wrapper on a block of hours.
- [Remaining performance obligation](https://www.sotkn.com/explained/remaining-performance-obligation-explained/) — unsatisfied contracted price; the accounting cousin of backlog.
- [Neocloud vs hyperscaler](https://www.sotkn.com/explained/neocloud-vs-hyperscaler/) — same GPUs, different who gets paid.
- [Speed-to-power](https://www.sotkn.com/explained/speed-to-power-explained-for-investors/) — the hall clock that decides when a take-or-pay block can start.

## Markets and stack doors

Layer: [neoclouds](https://www.sotkn.com/stack/neoclouds/). Sibling layer: [hyperscalers](https://www.sotkn.com/stack/hyperscalers/). Markets: [CoreWeave neocloud contracts](https://www.sotkn.com/markets/us/coreweave-neocloud-contracts/) · [US speed-to-power](https://www.sotkn.com/markets/us/us-speed-to-power-september-2026/) · [China HBM access](https://www.sotkn.com/markets/china/china-hbm-access-september-2026/).

[Get the Wire](https://www.sotkn.com/#/portal/signup) — short notes when offtake or hall clocks move. Stack: [What Does CoreWeave Do?](https://www.sotkn.com/stack/neoclouds/what-does-coreweave-do/) · [What Does Nebius Do?](https://www.sotkn.com/stack/neoclouds/what-does-nebius-do/). Analysis: [where the stuck step moves](https://www.sotkn.com/analysis/where-does-the-stuck-step-move/).

**How we check this**

Figures come from company filings and company releases, each dated in the list below. Capacity and timing from press reports are labelled as reported, not guided. Where we work something out ourselves, the arithmetic is shown in full.

**Last reviewed:** 29 Sep 2026 · **Next review:** after CoreWeave Q3 2026 results print take-or-pay mix and backlog conversion

Spot an error? [Tell us](mailto:sean@thekopinotes.com) and we will correct it and note the change here.

[Our editorial standards →](https://www.sotkn.com/editorial-standards/)

## Sources

- [CoreWeave Form 10-Q — take-or-pay vs on-demand; 98% committed revenue; RPO US$103.7B and conversion bands; deferred revenue US$9.7B; 15–25% weighted-average prepayment; Jane Street \~US$6.0B (period ended 30 Jun 2026, filed 12 Aug 2026)](https://www.sec.gov/Archives/edgar/data/1769628/000176962826000366/crwv-20260630.htm?ref=sotkn.com)
- [CoreWeave Q2 2026 results — revenue US$2.575B; revenue backlog \~US$104B; 1.5 GW active / \~3.7 GW contracted power (11 Aug 2026)](https://investors.coreweave.com/news/news-details/2026/CoreWeave-Reports-Strong-Second-Quarter-2026-Results/default.aspx?ref=sotkn.com)
- [Microsoft Form 10-K — purchase commitments US$194.060B including open purchase orders and take-or-pay contracts; US$169.008B due fiscal 2027 (year ended 30 Jun 2026)](https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm?ref=sotkn.com)
- [Nebius letter to shareholders Q2 2026 — \~70% of deals with 50–60% capex prepay; \~US$40B commitments; >US$9B prepayments expected in 2026 (12 Aug 2026)](https://assets.nebius.com/assets/a6ecfd85-a6cb-4967-8ef7-9a25bd261f9c/SHLQ226.pdf?ref=sotkn.com)
- [Nebius Q2 2026 financial results — deferred revenue US$6.0B at 30 Jun 2026 (12 Aug 2026)](https://nebius.com/newsroom/nebius-reports-second-quarter-2026-financial-results?ref=sotkn.com)