CoreWeave launches $2 billion convertible notes offering to fuel AI infrastructure expansion

CoreWeave plans $2B note offering to scale AI business while managing dilution

CoreWeave plans a $2 billion convertible note offering as it scales AI infrastructure, following a yearlong pursuit of Core Scientific for added power capacity. AI infrastructure provider CoreWeave (CRWV) plans to raise $2 billion through a private offering of convertible senior notes due 2031, with proceeds earmarked for general corporate purposes and for capped-call transactions that could reduce potential future shareholder dilution. The notes include an option for purchasers to buy an additional $300 million, the company said Monday. They can be settled in cash, shares or a combination of both at CoreWeave's discretion. To limit dilution if the notes are ultimately converted into equity, CoreWeave is entering into capped-call transactions. This hedge increases the effective conversion price and provides a degree of protection for existing shareholders while preserving financial flexibility. CoreWeave was founded in 2017 as Atlantic Crypto, a company that used GPUs to mine Ether (ETH). As the crypto market weakened, it pivoted in 2019 into cloud and high-performance computing services, eventually refocusing its GPU infrastructure on AI workloads. The company now operates a network of data centers built specifically for AI, and as of this year, reported running more than 33 facilities. It has not said whether proceeds from its latest fundraising will go toward further expanding that footprint. Related: TeraWulf looks to raise $500M as it bets big that AI is new Bitcoin Despite shifting its focus away from digital asset mining as its primary business, CoreWeave recently pursued a $9 billion acquisition of Core Scientific, one of the largest Bitcoin (BTC) mining operators. However, the deal fell through after Core Scientific's shareholders voted against the proposal. The attempted takeover fueled speculation about a return to crypto, but CoreWeave has characterized the effort differently. The company stated that the acquisition aimed to secure access to approximately 1.3 gigawatts of power capacity across Core Scientific's sites, which could be leveraged for future expansion in AI, cloud computing or other GPU-intensive workloads. CoreWeave had spent more than a year pursuing Core Scientific, beginning with an initial offer in June 2024 that the miner rejected. As Core Scientific's stock rose, the price needed to secure a deal also increased, ultimately contributing to the failure of the final proposal when shareholders voted it down.

CoreWeave Joins Nebius, SMCI & IREN In Convertibles Frenzy -- Bulls Beware - CoreWeave (NASDAQ:CRWV)

AI infrastructure might be the hottest trade on the screen, but the way it's being financed is a lot less glamorous. CoreWeave Inc (NASDAQ:CRWV) just announced a $2 billion private offering of convertible senior notes due 2031 -- and the stock promptly slid as much as 6%-9% today, a sharp reminder that the AI boom is increasingly being built on IOUs. Track CRWV stock here. CoreWeave Hits The Convert Button CoreWeave's deal adds another chunky layer of debt to a balance sheet already under scrutiny, with an option for initial buyers to take an extra $300 million in notes. Management says it's about funding more AI capacity, building out its "essential cloud for AI" model and keeping up with demand from hyperscale customers. The market's early verdict? More cautious than excited. Shares fell sharply on the news as traders immediately started running the future-dilution math rather than celebrating another growth headline. Read Also: CoreWeave To Double Down, Captures Microsoft And Google's AI Dollars The Pattern: Nebius, IREN, SMCI All Did This Too CoreWeave isn't alone. Nebius Group NV (NASDAQ:NBIS) has already raised about $2.75 billion in convertible senior notes alongside a $1 billion equity offering to fuel its AI cloud build-out. Read Also: Nebius Set To Join Meta, Oracle In The AI Debt Club IREN Ltd (NASDAQ:IREN) followed with $2 billion of long-dated convertibles, paired with equity and debt-refinancing moves to fund new AI data centers. Super Micro Computer Inc (NASDAQ:SMCI) went down a similar path earlier this year with a multibillion-dollar convertible deal that also triggered a sharp, immediate share-price hit. Each story is slightly different, but the playbook rhymes: raise big, call it "growth capital," and let tomorrow's shareholders worry about how much of the upside they still own once the notes eventually convert. The Quiet Fine Print: Dilution Risk Convertibles are clever until they aren't. They let AI infra players tap huge pools of capital with low coupons and delayed dilution -- but if the stocks work, those bonds are designed to become equity. That means more shares, lower percentage ownership for today's bulls and potentially heavier volatility around future conversion windows. In other words, CoreWeave's move fits neatly into an emerging AI-infrastructure theme: the story everyone's chasing is explosive growth; the subplot they're ignoring is who ends up footing the bill for it. Read Next: Cramer Groans Over IREN's Convert -- But Is This Dilution Actually A Power Play? Photo: Shutterstock CRWVCoreWeave Inc$84.17-4.67%OverviewIRENIREN Ltd$45.451.67%NBISNebius Group NV$98.500.46%SMCISuper Micro Computer Inc$35.091.17% This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs