CoreWeave Secures $650M in Secondary Sale, Valuation Soars to $23B Amid AI Cloud Expansion

AI cloud operator CoreWeave closes $650M secondary sale - SiliconANGLE

CoreWeave Inc., the operator of a cloud platform optimized for artificial intelligence workloads, today announced that it has closed a $650 million secondary sale. A standard funding round gives a startup access to capital for growth initiatives. In secondary sales, the proceeds go to the startup's shareholders. Such transactions are often used to give employees and early investors a chance to offload some of their equity before an initial public offering. CoreWeave's secondary sale was led by Jane Street, Magnetar, Fidelity Management and Macquarie Capital. They were joined by Cisco Investments and Pure Storage Inc. as well as a number of financial institutions. The deal reportedly values CoreWeave at $23 billion, which is $4 billion more than what it was worth after a funding round in May. Between the two rounds, the company secured a $650 million credit line from more than a half dozen banks. CoreWeave is using the billions of dollars in equity and debt financing it has raised since launch to build an expansive network of AI-optimized data centers. The company has set a goal of ending the year with 28 cloud facilities, twice the number it operated in late 2022. CoreWeave is planning to build 10 more data centers next year. This past June, it allocated $2.2 billion to launching three data centers in Norway, Sweden and Spain. It announced plans for two U.K. facilities a few weeks earlier. CoreWeave's data centers are equipped with AI clusters that each include up to tens of thousands of Nvidia Corp. graphics cards. In August, the company became the first cloud provider to launch instances powered by the chipmaker's H200 processor. The chip is one generation behind Nvidia's latest Blackwell B200 graphics processing unit, but the latter product has not yet started shipping to customers in large numbers. The H200 is an upgraded version of Nvidia's bestselling H100 GPU. The main difference is that the chipmaker expanded the onboard memory pool and also made it faster. Because AI models move data to and from RAM much more frequently than other types of software, speeding up a GPU's memory can significantly improve workload performance. CoreWeave's H200 instances combine the GPU with several other chips . There are Bluefield-3 processors, which are likewise made by Nvidia and help speed auxiliary computing tasks up such as managing the flow of network traffic. Meanwhile, central processing units from Intel Corp. perform the calculations not relegated to the instances' Nvidia-made silicon. The secondary sale announced today could be one of CoreWeave's last private financing deals before going public. Earlier this month, Bloomberg cited sources as saying that the cloud provider plans to float its shares in 2025. The investment banks that CoreWeave has hired to manage the listing reportedly include Morgan Stanley and Goldman Sachs, which managed its secondary sale.

CoreWeave closes $650 million secondary share sale at $23 billion valuation

(Reuters) -AI cloud platform operator CoreWeave said on Wednesday it closed a $650 million secondary share sale to investors, a deal that a source familiar with the matter said more than tripled the company's valuation over the past year to $23 billion. The investors were led by Jane Street, Magnetar, Fidelity Management and Macquarie Capital, and the higher valuation illustrated growing interest in the business of cloud infrastructure for generative artificial intelligence. CoreWeave provides access to data centers and high-powered chips for AI workloads, mainly from its backer and AI bellwether Nvidia. In the secondary stock sale, existing investors sold their holdings to new investors. The source familiar with the matter said the $23 billion valuation was up from $7 billion about a year ago. CoreWeave was valued at $19 billion in May after a $1.1 billion Series C investment led by private equity firm Coatue, a source said at that time. The secondary sale demonstrates Wall Street investors' interest in taking stakes in hot AI companies before they go public. CoreWeave is considered a candidate for an IPO next year. Demand for services like CoreWeave's, which make increasingly sophisticated generative AI applications possible at scale, has sky-rocketed since the launch of OpenAI's ChatGPT in late 2022. CoreWeave competes against cloud computing service providers such as tech giant Microsoft's Azure and Amazon's AWS. New Jersey-based CoreWeave said investors in the latest stock sale included Cisco Investments, Pure Storage, BlackRock, Coatue, Neuberger Berman and others. Morgan Stanley and Goldman Sachs advised CoreWeave. Funding for private AI and cloud companies in the U.S., Europe and Israel is rising after three years of decline, and the 2024 amount is estimated to hit $79.2 billion by the end of the year, venture capital firm Accel said in October. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Vijay Kishore and Cynthia Osterman)

Cisco, Pure Storage Invest In Nvidia-Backed Startup CoreWeave

'Our strategic collaboration with CoreWeave reflects a shared commitment to delivering AI innovation at scale and marks a major milestone in delivering the flexibility and scalability that AI-driven organizations need to thrive,' says Pure Storage CTO Rob Lee. Tech giants Cisco and Pure Storage have invested in startup CoreWeave, which is becoming a major player in the AI industry as a top provider of Nvidia GPUs and cloud computing for AI-hungry businesses. "Our strategic collaboration with CoreWeave reflects a shared commitment to delivering AI innovation at scale and marks a major milestone in delivering the flexibility and scalability that AI-driven organizations need to thrive," said Pure Storage's Rob Lee, chief technology officer, in a statement today announcing Pure Storage's investment in the startup. Roseland, N.J.-based CoreWeave confirmed it closed a $650 million secondary share sale with Cisco and Pure Storage alongside investment firms including BlackRock, Coatue and Fidelity. [Related: Gartner's Top 10 Tech Trends Of 2025: Agentic AI, Robots And Disinformation Security] Pure Storage, for its part, said in a statement that it will integrate its platform into CoreWeave's cloud service environments, which enables customers that require massive scale and flexibility in their infrastructure the ability to tailor their infrastructure and maximize performance. Cisco has been heavily investing in AI as seen by its massive $28 billion acquisition of Splunk in 2023. The San Jose, Calif.-based networking giant this year bought AI security trailblazer Robust Intelligence for an undisclosed sum. Cisco also announced its intent to acquire Deeper Insights AI Ltd., a privately held AI services company based in the U.K. Cisco did not respond for comment on its CoreWeave investment by press time. CoreWeave's $19 Billion Valuation In May, CoreWeave had a $19 billion valuation following a $1.1 billion Series C investment round. Last month, CoreWeave unveiled a $650 million credit line from Goldman Sachs and Morgan Stanley. Overall, the startup has raised a total of $14 billion. CoreWeave looks to battle cloud giants AWS and Google Cloud in providing Nvidia GPUs and cloud computing services to companies for AI workloads. Last year, Nvidia made an undisclosed investment in CoreWeave. The startup became the first cloud provider to bring Nvidia H200 Tensor Core GPUs to the market. This year, Nvidia made available its H200 GPUs via CoreWeave. CoreWeave recently committed to spending $8.7 billion over 10 years from bitcoin miner Core Scientific with the goal of increasing its data center capacity. "CoreWeave will also be among the first to market with the revolutionary Nvidia Blackwell platform, which lets organizations everywhere build, train, and serve trillion-parameter large language models more efficiently," said Brian Venturo, chief strategy officer at CoreWeave, in a recent blog post. "We continue to be laser-focused on meeting the insatiable demand for our infrastructure and managed cloud services." Since the start of 2024, CoreWeave has set up nine new data centers globally, with 11 more in progress, Venturo said. "In 2025, we anticipate starting work on 10 more on top of that. That is staggering progress," he added. CoreWeave's cloud architecture is a Kubernetes native cloud that's purpose-built for large scale, GPU-accelerated workloads. Designed for engineers and developers, CoreWeave offers access to a broad range of compute solutions that the company touts as up to 35-times faster and 80 percent less expensive than legacy cloud providers.