CoreWeave's $1.5B IPO: From Crypto Mining to AI Infrastructure Giant

CoreWeave co-founder explains how a closet of crypto-mining GPUs led to a $1.5B IPO | TechCrunch

CoreWeave began trading on Friday with more of a shrug than a war cry. The company priced at $40 on Thursday, below the $47- $50 price range announced. It also trimmed the number of shares offered. All told, CoreWeave raised $1.5 billion and nabbed a $14 billion market cap on Day 1, instead of a hoped-for $3 billion+ raise and a much higher valuation. Shares also opened at $39 (ouch!), and closed at $40. A lukewarm reception. Still, the company's IPO lands as the largest AI-related listing to date, and the biggest U.S. tech IPO since the heady days of 2021. Sitting in an ordinary white hoodie in a bland conference room, and talking with a detectable Jersey accent, Chief Strategy Officer Brian Venturo told TechCrunch that he feels very lucky. That's because it all started when he and his hedge fund friends had some extra time on their hands after their last venture together went south. He had been working as portfolio manager for the energy industry hedge fund, Hudson Ridge, founded by CoreWeave cofounder and CEO Michael Intrator. They had built an ML model to help them pick investments in the data-heavy energy industry. There they met their cofounder, Brannin McBee, who ran the data firm they used. But after the U.S. veered into its fracking boom era, they closed Hudson Ridge, leaving "a lot of time on our hands," Venturo says. Next up: crypto. The wanted to get in, but first "wanted to understand from the commodity side, how is this made," Venturo said. "So we started doing mining on the pool table in our Manhattan office." Like eating potato chips, one GPU turned into 10. Ten turned into 1,000. The rigs moved from pool table to closet. "Next thing we knew, we were in the most cliche place possible. We were in my grandfather's garage in New Jersey," he joked. Then their friends in finance wanted in so they bought more. "We were the largest Ethereum miner in the world for like two and a half years," he says. "At one point, we had 50,000 Nvidia consumer GPUs." These were chips meant for playing video games on consumer PCs, not running 24/7 in "a warehouse with no air conditioning or no ventilation," he said. So the cofounders built "crazy automation and health checking [systems] to run these low grade GPUs in the harshest environments." The team knew they wanted to use their GPU empire for other things, like maybe AI training. But they also needed to learn how. So they connected with EleutherAI, an open source group working on an LLM. CoreWeave offered access to their GPUs in exchange for help learning about AI training and announced a partnership in 2022. "We thought we were just going to learn how the infrastructure worked," Venturo says. But EleutherAI was working with hundreds of people building AI startups and "it was this total springboard moment for us." The good will from working with EleutherAI led these startups to become paid customers. It was "total luck started the training business," Venturo said. Stability AI got wind of CoreWeave through EleutherAI, and became a customer. The founders needed more capital to build better infrastructure. They went to dinner with Magnetar investors and "I was literally pounding on the dinner table," convincing them of the future of AI, Venturo said. Magnetar wrote them what he said was a $100 million check. OpenAI learned of CoreWeave through its work with the open source community. And Microsoft learned of the company through OpenAI. Microsoft became its biggest customer because it was OpenAI's biggest investor and sole cloud provider at the time. That's no longer the case. And OpenAI recently signed a $12 billion deal of its own with CoreWeave, bumping Microsoft from being its biggest customer. Today CoreWeave has 32 data centers and 250,000 GPUs, including Nvidia's difficult to obtain Blackwell chips, which supports AI reasoning, the company says. Venturo acknowledges that much has been made about CoreWeave's jaw-dropping $7.6 billion in debt, much of it due to be repaid in two years, FT reports. Against CoreWeave's $1.9 billion in revenues (even with, it says, $15 billion under contract), the debt is a big reason why investors have been cautious. However, Venturo insisted that CoreWeave has structured each customer deal to cover the debt used to buy the GPUs needed. More than that, though, he realizes that three hedge fund guys turned crypto miners who are now running an influential AI training infrastructure have been on a wild ride "There's so many pieces of luck along the way, it's crazy," he said.

CoreWeave's IPO Will Expose AI's Dirty Secrets

I've often complained that much of the AI-driven stock price bump enjoyed by big tech companies has come despite the absence of any real data on how this new business is truly performing. The hyperscalers -- those companies investing billions of dollars in building out artificial intelligence -- have given only the vaguest indications of AI revenues, hiding the numbers within broader segments. Meanwhile, the key pure-play AI companies, like OpenAI, are still private. Insights into their finances dribble out from time to time, whether intentionally or through leaks, never presenting a full picture. As such, it's hard for investors to gauge just how real the AI boom really is.

CoreWeave downsizes IPO amid AI bubble concerns

CoreWeave has pared back the scope of its initial public offering amid growing investor uncertainty in an overheating AI marketplace and risks posed by the GPU cloud specialist's exposure to a small number of customers. According to CoreWeave, pricing for its stock will be $40 per share, rather than the widely expected range of $47 to $55 per share, when it begins trading on the Nasdaq Global Select Market today under the ticker symbol "CRWV." The New Jersey-based biz is putting up about 37.5 million shares and expects to raise $1.5 billion, instead of an initial plan of 49 million shares, which would have netted somewhere around $2.7 billion. It is understood CoreWeave was originally hoping to see $4 billion raised from its public offering. CoreWeave is one of a new breed of cloud providers that focuses on GPU-based server infrastructure and services to support the development and training of AI models. It claims to have more than 250,000 GPUs online, spread across 32 datacenters, mostly located in the US. The firm has attracted billions in investment, including $7.5 billion raised in a debt deal with a bunch of private equity operators last year, adding to the $1.1 billion secured in a separate round prior to that. However, in a Form S-1, filed this month with the Securities and Exchange Commission (SEC) when CoreWeave announced the IPO, it confirmed that 77 percent of its revenues came from just two customers during 2024. Microsoft accounted for 62 percent of the total, and Nvidia was understood to comprise the remainder. CoreWeave also supplies services to Meta, IBM and Cohere, meaning it is exposed to the whims of a handful of major corporate clients. In addition to this, Microsoft is reportedly scaling back on some datacenter investments, sparking concerns that it had found itself in an oversupply situation - meaning it was revising downward the estimated compute capacity it needs to deliver AI services. As CoreWeave's business model is renting extra GPU capacity to cloud companies on demand, this was considered to be bad news. Uptake of Microsoft's Copilot AI is reportedly lower it expected, with a recent trial by Australia's Department of the Treasury discovering that participants found Copilot less useful than expected, while other projects using it have run into security and corporate governance concerns. At the same time, there is growing unease that the AI boom may be a bubble. This week, Alibaba Group co-founder and chairman Joe Tsai expressed doubts about the high level of funding going into building datacenters for AI, saying it looks set to exceed actual market demand. A recent report from Lenovo based on research by IDC also noted that many business leaders remain unconvinced that AI is worth all the investment. It found that only 4 of 33 AI proof-of-concept projects surveyed actually progressed into production, equating to an 88 percent failure rate. ®

Eight odd things in CoreWeave's IPO prospectus

Imagine a caravan maker. It sells caravans to a caravan park that only buys one type of caravan. The caravan park leases much of its land from another caravan park. The first caravan park has two big customers. One of the big customers is the caravan maker. The other big customer is the caravan maker's biggest customer. The biggest customer of the second caravan park is the first caravan park. CoreWeave . . . which leases computing capacity to tech groups building artificial intelligence models, is gearing up for the largest stock market debut of the year. This week it revealed it was seeking to raise as much as $2.7bn in the share sale, valuing the business at $32bn. As the New Jersey-based group prepares to start an investor roadshow, it is attracting scrutiny for its huge debt burden, borrowing at high interest rates, and forthcoming maturities on billions of dollars of loans. CoreWeave started out in 2017 as the side hustle of some traders at Hudson Ridge Asset Management, a defunct gas futures hedge fund. First it was an Ethereum miner that pivoted during the 2019 crypto crash to pay-per-hour 3D video rendering. The phrase "machine learning and AI" was added to CoreWeave's blurb in November 2022, the same month OpenAI launched, and soon grew to consume the whole. Shortly after CoreWeave's Series C funding round in May 2024, its website title changed from "The GPU Cloud" to "The AI Hyperscaler". MainFT's coverage focuses on the Blackstone and Magnetar Capital-backed company's $8bn of debt. The crux of the story is the WeWork-style mismatch between its assets and liabilities, along with some apparent carelessness around debt covenants: CoreWeave . . . violated several key terms of a $7.6bn loan last year, triggering a series of so-called technical defaults. [The company] disclosed in the exhibits to its IPO document that it had to ask its biggest lender Blackstone to amend the terms of the loan and "waive" these defaults in December. While CoreWeave did not miss any payments under the loan facility, it made a slew of serious administrative errors, which stemmed from beginning to use the financing to expand into western Europe. This clashed with key terms that in effect restricted the debt's collateral to the US. But with CoreWeave due to price its IPO later today, there's plenty more in the S-1 filing that deserves attention. Here's a quick tour of other notable items. Tim Bradshaw last year asked CoreWeave CEO Michael Intrator about the company's reliance on Nvidia, its 5.97 per cent shareholder, key supplier and key customer. Intrator . . . . . . batted off questions about whether prospective investors were concerned about backing a business that had raised capital from Nvidia, only to spend a significant portion of those funds on that company's products. "It's such a crap narrative," he said. "Nvidia invested $100mn. We've [raised] $12bn in debt and equity. It's an inconsequential amount of money in the relative scale of the amount of infrastructure we're buying." Crap narrative it may be, but let's take a look at what the S-1 says about customer concentration: We recognized an aggregate of approximately 77 per cent of our revenue from our top two customers for the year ended December 31, 2024. And . . . Our largest customer accounted for 16%, 35%, and 62% of our revenue for the years ended December 31, 2022, 2023, and 2024, respectively. CoreWeave's revenue was $1.9bn in 2024. Sixty-two per cent of $1.9bn is $1.18bn. That squares with its Microsoft Master Services Agreement (our bold): In February 2023, we entered into a Master Services Agreement (the "Microsoft Master Services Agreement") with Microsoft, pursuant to which we provide Microsoft with access to our infrastructure and platform services through fulfillment of reserved capacity orders submitted to us by Microsoft and as may be amended upon our and Microsoft's mutual agreement. We have recognized revenue of $81 million and $1.2 billion for the years ended December 31, 2023 and 2024, respectively, pursuant to the Microsoft Master Services Agreement. That leaves 15 per cent of $1.9bn, or $285mn. That's not far off the 20-month number CoreWeave gives for its Nvidia contract: In April 2023, we entered into a Master Services Agreement (the "Master Services Agreement") with NVIDIA, a beneficial owner of more than 5% of our outstanding capital stock, pursuant to which we provide NVIDIA with our infrastructure and platform services through fulfillment of order forms submitted to us by NVIDIA. As of December 31, 2024, NVIDIA has paid us an aggregate of approximately $320 million pursuant to the Master Services Agreement and related order forms. And since . . . None of our other customers represented 10% or more of our revenue for the year ended December 31, 2024. . . . it seems fair to conclude that CoreWeave's second-biggest customer in 2024 was Nvidia -- which makes the following line feel a bit incestuous: [O]ur current customers have contractually specified our use of NVIDIA GPUs. Much more on Nvidia later, but first . . . "We relentlessly and creatively explore additional opportunities to add power capacity", says CoreWeave's S-1. Nowhere is that better demonstrated than with Core Scientific. Core Scientific is a publicly traded crypto miner that collapsed into bankruptcy protection in 2022 alongside its main customer, Celsius Network, whose founder/CEO Alexander Mashinsky last year pleaded guilty to fraud and market manipulation. (Core Scientific's co-founder, the Viper Room nightclub co-owner and Fatburger promoter Darin Feinstein, stepped down as group co-chair in 2023.) CoreWeave last year tried to buy Core Scientific. After its takeover proposal was rejected, CoreWeave announced several contracts to rent and modify Core Scientific's rack space. At the 2024 year-end, Core Scientific's data centres accounted for "more than 500MW" of CoreWeave's approximately 1300MW of total capacity (72 per cent of which was not yet switched on). Core Scientific, in a 2024 results presentation, says its contracts with CoreWeave last 12 years. Core Scientific's disclosures also reveal who funds the conversion. A footnote to the above graphic says CoreWeave is paying Core Scientific "up to $1.5mn per HPC [high-performance computing] MW of data centre build-out costs" to a value of about $750mn. In exchange, CoreWeave gets an up-to-50 per cent rebate on its hosting costs. A follow-on deal involves CoreWeave funding $104mn of capex for no hosting rebate; more on that below. It's hard to shake the impression that CoreWeave is sinking a lot of capital and wearing most of the risk. Core Scientific's data centres will still be there long after CoreWeave's chips are fried. Yet the market gives Core Scientific an enterprise value of approximately 10 times EBIT -- a deep discount to conventional real estate investment trusts, which probably reflects some uncertainty about its anchor tenant. Meanwhile, CoreWeave's syndicate of 14 IPO advisers had reportedly been aiming for approximately 15 times forward EBIT. So even if recent speculation proves accurate that the price range has moved down by around 20 per cent, it still looks pretty punchy. GPUs are quickly depreciating assets. Not only do they burn out, they're constantly being superseded by new models. Massed Compute estimates value loss of 20 to 30 per cent a year. The investment case for an AI data centre hinges on the rental market growing fast enough to cover sunk costs before their hardware is obsolete. Here's how CoreWeave's S-1 estimates the useful life of its property and equipment: CoreWeave's rapid expansion last year makes it a big bet on Hopper, Nvidia's last-but-one architecture, which debuted in 2022. The S-1 doesn't give a detailed breakdown of assets but says a majority of its GPUs use Hopper. It's an expansion has been mirrored across the data centre industry, which has moved inside a year from a critical shortage of AI compute to a glut. "I start to see the beginning of some kind of bubble," Alibaba chair Joe Tsai told a conference this week. "I start to get worried when people are building data centres on spec. There are a number of people coming up, funds coming out, to raise billions or millions of capital." What's probably happening is that hyperscalers are no longer compelled to sprint and establish competitive moats by training the biggest models, so don't need to rent as much emergency capacity, while smaller operators are waiting to see where things land before committing funds. Here's what Goldman Sachs (a CoreWeave IPO lead underwriter) says in a note dated March 24 that downgraded ratings and forecasts for several Taiwanese AI server makers: 'Training' server will remain the growth driver given the increasing need for computing power to upgrade advanced AI models, but the volume ramp up is slower than we previously expected due to the combined reasons of product transitioning and uncertainties of demand and supply. As the GPU platform is transiting to next generation in 2H25, shipment can potentially slow during the transition period. Uncertainties remain in production ramp up, given the complexity of full rack systems and there remains debates on the demand for intense computing power after the release of more efficient AI models like DeepSeek. It's difficult to know how aggressively CoreWeave is competing with rivals on price because of . . . Over the past couple of years, CoreWeave has all but abandoned pay-as-you-go and moved its customer base on to take-or-pay contracts, billed monthly. The per-hour prices agreed are unlikely to match those quoted on its website, which haven't come down much since the boom times. The company's S-1 gives a "weighted average" customer contract length of around four years. Several of the S-1's risk factors are about how contract pricing is unproven. It's also, from the perspective of logic, all a bit challenging. Why would a company commit to a rental that's not much shorter than the predicted useful life of the asset being rented? What do they get out of hiring a rapidly-depreciating GPU other than the ability to renegotiate mid-contract or walk away? Isn't flexibility in the face of uncertainty the whole point of being asset-light? And in the context of CoreWeave's 12-year site leases and the recent switch of pricing model, what does a four-year "weighted average contract duration" mean in practice? Most of last year's revenue came from Microsoft, which has commitments to 2030, and last year's only other customer of note was Nvidia, whose biggest customer last year was Microsoft. As the FT reported last month, Microsoft has already pulled some business from CoreWeave "over delivery issues and missed deadlines". (CoreWeave denied that contracts were cancelled.) Assumptions of weak pricing power and high customer churn are premised on data centre compute being commoditised. Is that fair? In terms of financials, CoreWeave's operating expenses last year were 50 per cent tech/infrastructure (ie, buying stuff) plus 26 per cent for power, etc (ditto). Interest costs and writedowns were what turned its $324mn of operating income into a $863mn net loss. From those figures, it might be argued that customers have been making more use of its balance sheet than its cloud computing expertise. You say "special-purpose entity" and people will automatically think Enron. They have no reason to here. CoreWeave's S-1 makes clear it doesn't use off-balance-sheet vehicles, as you'd expect. The company's talk of monetising AI compute has only a superficial similarity to Enron's pitch to make broadband a new asset class. True, CoreWeave has raised most of its debt through a wholly owned special purpose vehicle, CoreWeave Compute Acquisition Co. IV LLC, which uses an undisclosed number of its parent company's GPUs and services contracts as collateral. But it's all relatively transparent. Even the technical defaults are disclosed, albeit it takes a dig through the ancillary docs and a trained eye to spot them: We note the Enron echo only because analysts at DA Davidson have heard it too. Here's an extract from their recent note: The key for CoreWeave was the ability to secure $12B worth of loans in order to purchase $12B worth of data center capacity. CoreWeave took a $100M investment from NVIDIA, a $320M contract from NVIDIA to buy its capacity, and a multi-year deal with Microsoft to raise $1.6B of equity and $12.9B of debt commitments, mostly at 10-14% interest but up to 17%. This allowed CoreWeave to purchase 250,000 GPUs from NVIDIA (about $10B worth). We believe the ~$8B it spent on GPUs made it a 6-7% customer for NVIDIA. How is this different from Enron's Special Purpose Entities? The previous description may have sounded familiar for investors in the early 2000s. Enron used Special Purpose Entities it created in order to offload assets and liabilities off its balance sheet and inflate its profits by generating revenue from these entities. In Enron's case these SPEs were controlled by executives and were hidden from the public, where in CoreWeave's case there are 3rd party investors and more transparency, though the impact to the balance sheet and profitability are reminiscent. We believe this structure may continue to work as long as demand for AI continues to grow exponentially. As long as demand for AI grows faster than hyperscalers are able to build data centers, CoreWeave may be able to use the proceeds of the IPO, borrow more debt and continue the cycle. However, if Microsoft ceases to need overflow capacity and/or OpenAI is not able to raise the $11.9B it is committed to, CoreWeave's growth path may not be sustainable. Hmmmmm. CoreWeave's Nvidia relationship isn't the only one with Freudian overtones. Here's what the S-1 reveals about Magnetar, another co-owner and customer: In August 2024, we entered into an agreement (as amended, the "MagAI Capacity Agreement") with a fund managed by Magnetar ("MagAI Ventures"). Under the MagAI Capacity Agreement, we will provide certain portfolio companies of MagAI Ventures with a predetermined amount of cloud computing services at a pre-negotiated hourly rate. The specific amount of cloud computing services to be used by each portfolio company, if any, will be negotiated individually with each portfolio company, and will be subject to final approval by MagAI Ventures. We received a refundable deposit of approximately $230 million in connection with the MagAI Capacity Agreement. Any consumption of cloud services by MagAI Ventures, including by their portfolio companies, under this arrangement is deducted from this deposit amount, with the unused portion refunded back to MagAI Ventures at the end of the term of the arrangement. A fund operated by CoreWeave's co-owner paying a $230mn deposit to CoreWeave might look a bit conflicted, but it's not like CoreWeave is an investor in the fund! Wait, sorry, yes it is: On June 14, 2024, we [CoreWeave] contributed an aggregate amount of $50 million to a fund managed by Magnetar ("MAIV") in connection with MAIV's purchase of shares of preferred stock in a private company. Buried in CoreWeave's "subsequent events* addendum is this paragraph. In February 2025, the Company modified multiple lease agreements with a single landlord. The modifications changed the contracted power capacity, term, and contractual payments, and terminated the related escrow agreements. As a result of the modification, the Company will receive an additional 70 MW of contracted power capacity. The Company received a refund of $304 million of unused escrow funds previously included within other non-current assets, and expects to make approximately $1.7 billion of additional rent payments over the 13 year term of these leases. The *single landlord" is Core Scientific, which refers to the follow-on deal in its results presentation. What's odd here is the $304mn refund. For any company swimming in liquidity, it seems small beer. Page 84 of the S-1 has the following breakdown of debt: Term loan facility (4) is an interesting one. It's a $1bn credit line from JPMorgan, mostly unsecured, that CoreWeave agreed in December. Meanwhile: The Company entered into various agreements with an OEM between February and December 2024 whereby the Company obtained financing for certain equipment with an aggregate notional balance of $1.3 billion as of December 31, 2024. Related to the financing agreements, the Company granted a security interest for the financed equipment. The agreements are accounted for as financing arrangements, with terms between two to three years. The financing arrangements have a stated repayment schedule over the term with effective interest rates between 9% to 11%. The Company did not incur any debt issuance costs associated with the financing arrangements. Interest expense for the year ended December 31, 2024 was $60 million. From the above paragraph, only an expert in supplier-finance disclosures will follow who's paying whose bills. What we can say is that "certain equipment" purchased is highly likely to be Nvidia chips, and that CoreWeave's S-1 names Dell and Super Micro Computer as among its OEM partners. The term loan's size and proximity to the financing agreement are further complications. Whatever's going on, it's another aspect of the business that might look uncomfortably circular. Stuff like this doesn't tend to get picked up because CoreWeave rents GPUs rather than, for example, caravans. The market for generative AI has been growing in a way that the market for towable holiday accommodation has not. The internal economics of both industries are not dissimilar, however, particularly around mismatches between sunk capex, asset depreciation, contract lengths and uncertain returns. But maybe, if the caravan industry were as insular and interconnected as AI, it would have just as exciting a growth story to tell.

What CoreWeave investors can learn from a dotcom IPO comparison

Imagine this set-up for a new stock market listing. A transformational new technology has sparked an infrastructure spending boom. Entrepreneurs from outside the tech industry have spotted the opportunity to borrow heavily to build a new type of infrastructure company, narrowly focused on feeding the new demand. With Wall Street hungry for pure-play ways to invest in the new technology, the conditions for an IPO would seem opportune. That could be a description of CoreWeave, the wholesaler of AI computing power. Its shares are set to start trading on Wall Street on Friday in a litmus test for the state of the AI capital spending boom. But it could also describe Global Crossing, a hot telecom start-up from the late 1990s. At a time when the financial markets were transfixed by the potential of the early internet, Global Crossing amassed undersea fibre optic cables capable of handling a surge in traffic -- much as CoreWeave has amassed banks of powerful graphics processing units made by Nvidia. Global Crossing boomed as internet fervour took off, only to crash into bankruptcy four years after it launched. Internet demand was slow to pick up and telecoms companies were left with massive overcapacity. Echoes from the bubble in networks a quarter of a century ago are hard to avoid as the AI infrastructure boom continues apace. But like all comparisons, it is instructive as much for the differences as the similarities. CoreWeave, unlike Global Crossing, arrives on Wall Street with significant demand: its revenue leapt eight-fold last year, to $1.9bn. It has another $26.5bn in future revenue already under contract, much of it from giant tech companies which have strong balance sheets and seem unlikely to renege. Yet, like Global Crossing, it is a wholesaler, vulnerable to the spending decisions of a handful of customers. Some of these build most of their own data centres, meaning they look to lease equipment from companies like CoreWeave as a release valve for their excess demand. That makes it something of an arbitrage play for GPUs. And, ultimately, its fortunes depend on its customers' customers quickly finding productive and profitable uses for all that new computing power -- otherwise its GPUs will be as unwanted as those undersea cables at the turn of the century. So far, the company has shown enviable timing, pivoting from its initial business of crypto mining into AI infrastructure just as ChatGPT fever took hold. And it has manoeuvred nimbly between the tech giants: just as it fills a need for big cloud players such as Microsoft, which accounted for much of its revenue last year, it serves a strategic purpose for Nvidia, which has every reason to channel scarce GPUs to new companies like CoreWeave to reduce its dependence on the biggest clouds. Two big timing issues loom. One is the speed at which Nvidia's technology is advancing, potentially rendering older generations of its GPUs obsolete. CoreWeave recently stretched the depreciation schedule for its AI servers, extending their expected life to six years. That echoes accounting practices at companies like Microsoft and Google, though it could leave it holding unproductive and undepreciated assets. However, CoreWeave claims that in cash terms, its spending on tech equipment pays for itself within two and a half years. That relatively quick payback reflects enviable pricing power -- something that will be difficult to maintain if supply of the hottest new GPUs catches up with demand. The other timing issue has to do with whether generative AI can live up its hype quickly enough to justify the leap in capacity. Microsoft chief executive Satya Nadella recently told an interviewer that he was very happy to be leasing a lot of his company's infrastructure in 2027 and 2028 rather than owning it outright. "The only thing that's going to happen with all the compute build is the prices are going to come down," he said. A smart trader might see the sense in taking some of their chips off the table. Gary Winnick, who founded Global Crossing, sold hundreds of millions of dollars' worth of his stock in the company while it was riding high. The three founders of CoreWeave, who come from the world of energy trading, have also sold nearly $500mn of shares between them, even before their company goes public. Plenty of investors are likely to welcome a new chance to bet on the AI boom -- but at the right price.

CoreWeave's retail appeal may be tempered by IPO timing, financial pressures

March 28 (Reuters) - Concerns sparked by CoreWeave's debt pile and other financial challenges may weigh on retail investor enthusiasm as it prepares to go public after what analysts said was a poorly timed IPO. The Nvidia-backed AI infrastructure company, which focuses on data centers and cloud services, is listing at a time when the equity markets are under pressure from tariff uncertainty and on rising concerns over the competition posed by China's artificial intelligence startup DeepSeek. Frustration is also mounting over when Big Tech's massive investments in AI will yield returns, leading to concerns CoreWeave may have missed the ideal window to list its shares. "It feels like the IPO was poorly timed. Had it floated a year ago, demand might have been much stronger than now as AI interest has started to wane," Dan Coatsworth, investment analyst at AJ Bell, said. The listing comes at a time when IPO-bound companies, even in the most high-profile sectors, have been under intense scrutiny. Despite a recovery, the IPO market is nowhere near the pandemic years when listings had soared. CoreWeave already suffered a setback on Thursday when it downsized its IPO. Under the new terms, it fetched a fully diluted valuation of around $23 billion compared with the $32 billion it was targeting earlier. "It's got a lot of risks. I don't know what is the long-term sustainability of the business," said Kamran Ansari, managing partner at Kapital Ventures. CoreWeave's revenue jumped more than eight-fold last year, but sustaining that growth will be critical. "There will be risks over the longer term around the company maintaining its impressive growth and not missing earnings estimates," said Samuel Kerr, head of equity capital markets at Mergermarket. CoreWeave had about $8 billion in debt as of last year. The company said earlier this month that it plans to use about $1 billion of the IPO proceeds to reduce debt. Some investors have also flagged concerns about the company's heavy reliance on Microsoft (MSFT.O), opens new tab, whose shifting AI data center strategy could impact long-term demand for chips known as graphics processing units, or GPUs. AI HYPE Top AI players have sparked massive interest from retail investors in recent years. Nvidia, Microsoft, Amazon (AMZN.O), opens new tab, Apple (AAPL.O), opens new tab and Alphabet (GOOGL.O), opens new tab were among the top 20 stocks drawing retail investor inflows in 2024, according to Vanda Research. Some experts have also brushed aside concerns stemming from DeepSeek, noting that heightened competition will drive more investment rather than leading to cutbacks. "AI remains a very hot investment theme despite doubts earlier this year following the emergence of DeepSeek," Mergermarket's Kerr said. Those seeking opportunities beyond the top tech names may back CoreWeave. Net inflows from retail investors into U.S. equities and exchange-traded funds totaled $69.8 billion as of March 25 this year, only slightly below the $71.7 billion invested in the final quarter of 2024, according to Vanda Research. "Retail investors will be drawn to (CoreWeave) as they continue to look for other avenues of returns away from the potentially lackluster performance of the MAG7 (Magnificent Seven) stocks," Josef Schuster, CEO of IPO research firm IPOX, said. The Magnificent Seven - a group of tech giants that have driven much of the stock market's gains in recent years - have been battered so far in 2025. CoreWeave did not immediately respond to a request for comment. It is set to debut later on Friday. Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology Niket Nishant Thomson Reuters Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru. Manya Saini Thomson Reuters Manya Saini reports on prominent publicly listed U.S. financial firms including Wall Street's biggest banks, card companies, asset managers and fintechs. Also covers late-stage venture capital funding, initial public offerings on U.S. exchanges alongside news and regulatory developments in the cryptocurrency industry. Her work usually appears in the finance, markets, business and future of money sections of the website.

The year's biggest AI float just became an IPOuroboros

CoreWeave is planning to slash the size of its initial public offering and bring in Nvidia as an anchor investor, another sign of wavering investor demand for artificial intelligence infrastructure on Wall Street. The cloud computing provider will formally set the price of its shares later on Thursday and is expecting to pare back its offering to around $1.5bn, according to people close to the matter. CoreWeave had initially targeted raising $4bn and dropped that figure to $2.7bn when it began a roadshow to generate interest for its shares last week. No official details yet on float pricing and structure, including the size of Nvidia's anchor, so things could still change. CNBC reported earlier that Nvidia's fresh backing of CoreWeave would also include a $250mn order, presumably in addition to the $320mn of server time it agreed to buy in April 2023. We write at length elsewhere about how reliant CoreWeave is on Nvidia, its sole GPU supplier, 5.97 per cent shareholder and second-biggest customer. We also mention how hard it's been for CoreWeave's team of 14 IPO advisers to convince the buy-side that its debt-burdened business model is sustainable. On the one hand, bringing in Nvidia to shore up the IPO might be seen to deepen their relationship and guarantee early drops on new hardware that might provide a competitive advantage. On the other hand, it won't make worries about concentration go away. In an anonymous poll seen by FT Alphaville, RBC Capital Markets asked hedge-fund and long-only clients: "Does CoreWeave have a sustainable moat?" Ninety per cent voted no. Here are a few of the clients' explanations as to why: Their moat is priority access to GPUs - that's it Capital/relationships are the barrier and won't last Near-term they have capacity which is needed but longer-term, no. Anyone can buy GPUs, put them into a cluster, and sell the capacity to larger players. Competing with the hyperscalers with deeper pocket books who are also doing this whole nother thing. The business model is predicated on the scarcity of NVDA chips. If, and when, the market loosens a bit or a competing chip manufacturer ramps up, the need for their "conduit" business model will be less needed. Equipment rental business with cost of capital being the only LT advantage . . . In answer to "What is the least attractive financial aspect of CoreWeave's financials?", more than half of RBC survey respondents said "customer concentration" (meaning Microsoft and Nvidia). Respondents' reasoning included: CoreWeave's largest customer [Microsoft] is publicly telling investors it no longer has any need for CoreWeave and will build its own datacenters from here on out If this is truly 'overflow' capacity for MSFT, then this is a tough model to invest [in] I don't like that I would be investing in OpenAI by proxy and that feels like an investment that is a function of Sam Altman's ability to raise capital, first MSFT, now SoftBank, then... Saudi Arabia? Further and further out the risk curve. And under "What do you think investors are missing about the CoreWeave story?", one money manager wrote: NVDA is 15% of revs which they levered up to buy billions ($) of GPUs. Why does NVDA need to pay somebody to access their own GPUs? It is a gimmick to create competitive tension for GPUs outside of the hyperscalers to give NVDA pricing leverage. As big as CRWV is, it looks small relative to Stargate scale. Move downmarket will require customers hand-holding and features akin to a hyperscaler. That will be tough. In the meantime, the banks are racing to get the deal done and their bank loans refinanced with bonds before this story meets reality. Official IPO pricing is due after the US closing bell, but it looks a lot like reality is already catching up.

CoreWeave to cut size and value of IPO and add Nvidia as anchor investor

CoreWeave is planning to slash the size and value of its initial public offering and bring in Nvidia as an anchor investor, another sign of wavering investor demand for artificial intelligence infrastructure on Wall Street. The cloud computing provider will formally set the price of its shares later on Thursday and is expecting to pare back its offering to about $1.5bn, according to people close to the matter. CoreWeave had initially targeted raising $4bn and dropped that figure to $2.7bn when it began a roadshow to generate interest for its shares last week. The people said the size and price of the deal could still change before the IPO on Thursday evening. Nvidia, which already owns about 6 per cent of CoreWeave, would buy an undisclosed chunk of shares at the IPO, the people said. Nvidia is also one of CoreWeave's largest suppliers and among its biggest customers. CoreWeave now plans to sell about 37.5mn shares at around $40 a piece, the people added, having initially hoped to sell about 49mn shares for between $47 and $55 per share. The new price would give the company a market value of $23bn. The company will begin trading on Nasdaq in New York on Friday morning. The reductions mark a dramatic climbdown for what is still expected to be one of the biggest tech listings of the year. CoreWeave was last valued at $23bn in its most recent private market valuation in October 2024. Initial discussions with its bankers sought to value the company at more than $35bn in the IPO. CoreWeave declined to comment. Thursday's share sale is being closely watched as a signal that a years-long frozen period for tech IPOs is over. Fintech start-ups Klarna and Chime, retail trading platform eToro and ticketing group StubHub have also filed for IPOs and are expected to list in the next two months. US natural gas exporter Venture Global, which was billed as a blockbuster IPO, has fallen more than 50 per cent since it went public in late January. The Financial Times this week reported that CoreWeave violated several key terms of a $7.6bn loan last year, triggering a series of so-called technical defaults. The New Jersey-based company has attracted intense scrutiny in recent weeks for its large debt burden, close relationship with Nvidia and forthcoming maturities on billions of dollars of loans. CoreWeave's largest customer, Microsoft, walked away from some of its commitments to the company, the FT reported this month. CoreWeave denied that contracts had been cancelled. Friday's planned listing comes as the Trump administration's aggressive trade agenda has roiled US equity markets in recent weeks, hitting shares in tech companies particularly hard. The Philadelphia Semiconductor index, an index tracking 30 of the world's biggest semiconductor manufacturers, has lost 11 per cent this year. Nvidia has slipped 16 per cent over the same period. Alibaba chair Joe Tsai on Tuesday warned of a potential "bubble" emerging in data centre construction, further denting investor sentiment in the middle of CoreWeave's pre-IPO investor roadshow. JPMorgan, Morgan Stanley and Goldman Sachs are acting as lead underwriters on the deal.

CoreWeave scripts AI's Tinker Bell moment

NEW YORK, March 27 (Reuters Breakingviews) - CoreWeave is the Tinker Bell of the artificial intelligence trade. Like the fairy from "Peter Pan", it is capable of soaring flight, growing revenue eightfold last year to $1.9 billion. Yet as the story goes, it requires belief to stay aloft. The primary suspension of doubt: that dependence on one supplier and one customer does not matter. As the company struggles to conclude an initial public offering, cutting its valuation target by 22% from the middle of an earlier range to $23 billion according to a Reuters report, CoreWeave may challenge the faith undergirding the AI boom. Chief Executive Michael Intrator has a few key counterparties. Technology titan Microsoft (MSFT.O), opens new tab accounted for 62% of revenue, opens new tab last year. To feed its appetite, CoreWeave amassed 250,000 graphics processing units from chipmaker Nvidia (NVDA.O), opens new tab, the standard for AI computation. Funding this left the company carrying $8 billion of outstanding debt. Just keeping pace is difficult. Chips get more powerful with every generation, reducing old silicon's value. But CoreWeave uses GPUs as collateral, agreeing to high rates and fast repayment to lenders like Magnetar Capital, which also holds a 30% stake. CoreWeave owes over $7 billion of interest and principal repayments over the next two years. IPO funds and cash from existing contracts should cover it. The future is less certain. CoreWeave's best customer is pulling back. Microsoft-backed OpenAI has stepped in with a five-year, $12 billion contract. Still, for debt to support capacity for "specified" investment-grade customers, CoreWeave pays Magnetar a roughly 10% interest rate. That rises to 17% for junk-rated clients. Meanwhile, OpenAI says it won't become cash flow positive until 2029, when in anticipates $125 billion of annual revenue, some 10 times expected 2025 sales. Its dependability rests on boss Sam Altman's ability to continue raising vast sums of capital to incinerate. He's close to a gigantic $40 billion round led by SoftBank (9984.T), opens new tab, Bloomberg, opens new tab reported - including participation from Magnetar. This is CoreWeave's real test: whether it can sustain belief in this circular silicon economy. After all, stepping outside of it to service clients without Microsoft's AAA credit rating would be expensive. This concern will affect the entire AI boom, as mutual back-scratching, opens new tab agreements are pervasive. Consider Nvidia, whose market value has grown ten-fold since ChatGPT began the AI scramble in 2022. It, too, depends on a few big customers' budgets. It is even stepping in to support CoreWeave's IPO with a $250 million investment, Reuters reported, on top of the near-6% it already holds. In effect, the $2.8 trillion Goliath is financing a large buyer of its GPUs. Doubts about overcapacity are rising, and where the ultimate value in AI will actually be generated is still unclear. A CoreWeave stumble risks shaking AI investors' fairytale flights of fancy. Follow @rob_cyran, opens new tab on X (The author is a Reuters Breakingviews columnist. The opinions expressed are their own.) CONTEXT NEWS CoreWeave slashed the proposed price range and number of shares to be sold in its planned initial public offering, Reuters reported on March 27, citing a source familiar with the matter. The provider of cloud computing services powered largely by graphics processing units from chipmaker Nvidia plans to sell 37.5 million shares at $40 each. It had previously sought to sell 49 million shares at a price of between $47 and $55. Nvidia will buy up to $250 million shares at the $40 price, Reuters also reported. The company owns a 6% stake in CoreWeave, which has bought over 250,000 of its GPUs. Editing by Jonathan Guilford and Pranav Kiran Suggested Topics:Breakingviews Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors. Rob Cyran Thomson Reuters Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the startup of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University.

CoreWeave chief Michael Intrator tests market faith in AI hype

CoreWeave chief executive Michael Intrator and executives at private equity giant Blackstone got together in the summer of 2023 in a WeWork in Brooklyn to hash out the terms of a large and unusual loan. That first deal would lead to one of the largest private financings in US corporate history, Blackstone's biggest single loan commitment and transformed a seven-year-old start-up into an artificial intelligence infrastructure behemoth. On Friday, CoreWeave became the largest tech company to publicly list its shares in 18 months. The initial public offering was far smaller than planned, raising about half of what its bankers asked investors for last week at a market valuation of $23bn -- about $10bn less than initially hoped. That fall reflected doubts over the company's massive huge debt burden, complex financial structure, close relationship with chipmaker Nvidia and high customer concentration risk. But the listing remains a landmark moment for Intrator, 55, whose stake in the company is worth about $3bn. His appetite for extreme leverage and risky decision-making has grown CoreWeave from a small crypto-mining business to an AI computing giant in a market dominated by hyperscalers such as Microsoft and Amazon. "It wasn't like talking to Steve Jobs who was trying to sell a vision," said a person close to the Blackstone deal. "[Intrator] is hyper-rational, cerebral, someone who doesn't leave the details to others." The deal, agreed in July 2023, meant Blackstone would lead a $2.3bn debt financing to CoreWeave, whose revenue was just $16mn at the time. Blackstone's exuberance was a sign of the times. Months earlier, OpenAI had released ChatGPT and investors were racing for access to AI deals. Barely a year later, Blackstone signed a second debt deal with CoreWeave worth $7.6bn. The loans were secured against CoreWeave's stash of Nvidia graphics processing units -- the chips that have become the hottest commodity for companies building AI systems -- as well as contracts it had agreed to lease computing power to Big Tech companies. Intrator used the cash to buy tens of thousands more GPUs from Nvidia, growing CoreWeave's stockpile to more than 250,000 chips, allowing it to attract more and larger customers and increase revenue to $1.9bn by 2024. He started to treat CoreWeave's growth like a structured credit play, according to people who know him, viewing its assets like securities that could be bundled and sold to investors. The success of these deals pioneered a flurry of asset-backed lending with other big investors extending loans to chip-rich AI start-ups -- although none quite at the scale of CoreWeave. "No one had ever heard of GPU financing or CoreWeave before Blackstone made the large loan into them," said the person close to the deal. Both luck and foresight meant Intrator was holding a golden ticket at exactly the moment the AI industry hit its Cambrian explosion. Intrator, who wears thick-rimmed glasses, flannel shirts and Hoka trainers, spent most of his career as a commodities trader, buying and selling carbon credits and natural gas futures. He worked first at Natsource, a renewables fund manager, and then at his own hedge fund, Hudson Ridge Asset Management. He bought his first GPU while running Hudson Ridge to kick-start a side hustle in cryptocurrency mining -- the business that would eventually become CoreWeave. "In 2016, we bought our first GPU, plugged it in, sat it on a pool table in a lower Manhattan office overlooking the East River, and mined our first block on the ethereum network," Intrator wrote in a blog post. He spun the venture out into a company initially named Atlantic Crypto, alongside co-founders Brian Venturo, a partner at Hudson Ridge, and Brannin McBee, an energy trader at a fund in Houston. They soon moved out of the Manhattan skyscraper, fearing the heat from the servers risked burning down the building, instead setting up in a garage in a New Jersey suburb that would become their first data centre. "One GPU turned into hundreds, then tens of thousands," Intrator wrote. The buying spree accelerated after crypto prices crashed in 2019 and GPUs could be bought at distressed prices. They pivoted the business, first to lease compute capacity to video game rendering, and then to AI developers. This early and prolific collecting of GPUs put CoreWeave in good standing with Nvidia, which added the company to its "partner network" and allocated it large sums of chips. By early 2023, Nvidia was CoreWeave's largest supplier, one of its biggest customers, and had invested $100mn in the company, owning about 6 per cent. On Thursday, as CoreWeave was forced to cut the size and price of its IPO, Nvidia stepped in as one of the biggest buyers, spending $250mn to increase its stake in the business. Intrator cultivated another early relationship that went on to pay big dividends for CoreWeave years later, according to people close to the company. Inflection AI, a start-up founded by ex-DeepMind co-founder Mustafa Suleyman and LinkedIn founder Reid Hoffman, was one of CoreWeave's first big customers. Suleyman moved to Microsoft as head of its AI business early last year. By the end of last year, Microsoft accounted for 62 per cent of all of its revenues and had signed contracts worth about $10bn. People close to the matter said Suleyman and Hoffman, who sits on Microsoft's board, were central to CoreWeave making inroads with chief Satya Nadella. The three CoreWeave founders have already made a fortune, each selling at least $150mn worth of their stock in the company since December 2023, according to the IPO filings CoreWeave's listing has been closely scrutinised as a signal of the confidence in massive spending on AI in recent years. Big Tech companies have allocated hundreds of billions of dollars to building the infrastructure that will power their AI models. But there are mounting signs of a glut of supply. Microsoft has backed out of construction on some data centres, according to analysts, with Nadella warning of an "overbuild" earlier this year. It also walked away from a multibillion-dollar commitment to CoreWeave that it had not yet signed as a contract, according to people familiar with the matter. Intrator, who has faced tough questions in run-up to the IPO, is neither a fan of the hard sell nor the limelight, according to people close to him. Life on the public markets may cause further unrest. On Friday, just before CoreWeave started trading, Intrator told the Financial Times it would take "a while" for public markets investors to understand its business model. "But our expectation is that the equity markets, very much like the debt markets, after they get to spend some time with the company . . . they will get very comfortable."

CoreWeave set to climb 18% in debut, on track for $27 billion valuation

March 28 (Reuters) - CoreWeave's (CRWV.O), opens new tab shares were set to open nearly 18% above their offer price in their Nasdaq debut on Friday, giving the Nvidia-backed AI infrastructure firm a potential valuation of $27.4 billion on a fully diluted basis. A strong debut would be a welcome sign for the company, especially since its lofty targets already took a hit on Thursday when it had to downsize its initial public offering. It may also offer hope to other IPO candidates that smooth listings are achievable with tempered valuations, even at a time when equity markets are already grappling with tariff-related turmoil. The stock was indicated to open at $47, compared with the IPO price of $40. "The U.S. IPO market is at an inflection point. This next batch of deals will determine whether the U.S. IPO momentum continues through the second quarter, or whether issuers decide the risk now isn't worth it," said Samuel Kerr, head of equity capital markets at Mergermarket. The debut will also test the limits of the AI hype, given increasing frustration over Big Tech's massive spending spree and fears of competition from China's artificial intelligence startup DeepSeek. While investors have propelled AI-related companies such as Nvidia (NVDA.O), opens new tab and Microsoft (MSFT.O), opens new tab to stratospheric valuations, CoreWeave has stirred concerns among risk-averse investors. The company provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. CoreWeave's capital-intensive business model also raised questions about sustainability, sources said. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the growth of the company has been meteoric, its long-term sustainability is yet to be tested. CoreWeave had around $8 billion in debt as of last year. The company said earlier this month it plans to use about $1 billion of the IPO proceeds to pay down debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. While investors appear comfortable with the company's high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. The startup has also consistently posted losses, and IPO investors in the last few years have been wary of backing companies with no history of profitability. FROM CRYPTO TO AI Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after Ethereum's 2022 upgrade, "The Merge," slashed rewards for miners. It signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, forging ties with the most prominent startup in the industry. CoreWeave's revenue has also grown at a breakneck pace, climbing more than eight-fold last year. But it may need to do more to convince investors. "For most venture-backed deep tech startups, it's going to take more than hype to make it through the public markets right now," said Anthony Georgiades, founder and general partner at Innovating Capital. CoreWeave's shares are set to trade under the symbol "CRWV". The IPO was underwritten by a syndicate of 18 banks, including Morgan Stanley, J.P.Morgan and Goldman Sachs. Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Deals Niket Nishant Thomson Reuters Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru. Manya Saini Thomson Reuters Manya Saini reports on prominent publicly listed U.S. financial firms including Wall Street's biggest banks, card companies, asset managers and fintechs. Also covers late-stage venture capital funding, initial public offerings on U.S. exchanges alongside news and regulatory developments in the cryptocurrency industry. Her work usually appears in the finance, markets, business and future of money sections of the website.

CoreWeave rises above IPO price on third trading day

April 1 (Reuters) - Artificial intelligence startup CoreWeave's (CRWV.O), opens new tab shares were up 17% at $43.50 on their third day of trading on Tuesday, above their initial public offering price of $40. On Friday, the Nvidia (NVDA.O), opens new tab-backed stock debuted for trading at $39, giving the AI infrastructure firm a valuation of $23 billion on a fully diluted basis. CoreWeave had already taken a hit on Thursday when it had to downsize its IPO. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported last week. Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

Nvidia to anchor CoreWeave IPO at $40 a share, source says

Nvidia is aiming to anchor CoreWeave's initial public offering at $40 a share with a $250 million order, according to a person familiar with the matter. The company initially filed the offering at $47 to $55 per share. The source told CNBC's Leslie Picker that CoreWeave is not planning on downsizing or refiling at this time. CoreWeave did not immediately respond to CNBC's request for comment. Nvidia is already a significant customer of CoreWeave, which rents out remote access to computers based on Nvidia's AI chips. The tech giant, which also owns about 6% of the company, declined to comment on the order.

CoreWeave's debut is landmark moment in AI boom and could kick off 'IPO parade'

Michael Intrator, co-founder and CEO of CoreWeave, on Centre Stage during day two of Web Summit 2024 at the MEO Arena in Lisbon, Portugal. When SuRo Capital CEO Mark Klein brought up the name CoreWeave to Wall Street tech analysts last summer, he would sometimes get looks of confusion. They'd never heard of the company. Klein, meanwhile, was building a big position in a startup that he viewed as becoming a key player in artificial intelligence infrastructure. In May, his firm invested $15 million in the company, and by the end of the year it hat a put in a total of $25 million, accounting for 17% of its fund. It was SuRo's biggest bet in its14-year history, even topping the $17.5 million it invested in OpenAI. On his firm's earnings call in May, after the initial transaction, Klein called out CoreWeave's access to Nvidia's graphics processing units (GPUs) and said the company was providing the technology necessary for AI developers to train their high-powered models. "Over the last few months, CoreWeave has cemented itself as a leader in AI infrastructure," Klein said on the call. Ten months later, Klein and his fellow AI bulls have turned their attention to the Nasdaq, where CoreWeave is set this week to become the first pure-play AI company to hit the stock market. The company's IPO is a landmark event for an industry that has exploded since the launch of OpenAI's ChatGPT in late 2022 -- and has also attracted billions of dollars in capital from tech giants, hedge funds, private equity firms and venture capitalists. But there are ample reasons for skepticism. The IPO market has been very slow to reopen after slamming shut more than three years ago, when rising interest rates and soaring inflation pushed investors out of risky assets. And tech stocks have been particularly volatile to start 2025 due to President Donald Trump's tariffs on the country's top trading partners, and concerns that massive government cost cuts will push the economy into a recession. The Nasdaq is down more than 7% so far this year, on pace for its worst quarterly performance since mid-2022. Chipmaker Cerebras was slated to be the first AI IPO, but that deal got caught up in a national security review soon after the company filed to go public in September. It remains on the sidelines. "This is a very important IPO for the overall market," said Tim Guleri, managing partner at Sierra Ventures, referring to CoreWeave. "We've had a very dry spell." Guleri's AI investments include Weav.ai, which develops tools for insurers.

CoreWeave prices IPO at $40 a share, below expected range

Michael Intrator, co-founder and CEO of CoreWeave, speaks at Web Summit in Lisbon, Portugal, on Nov. 13, 2024. CoreWeave on Thursday priced shares at $40 in the company's IPO, raising $1.5 billion in the biggest U.S. tech offering since 2021, CNBC has confirmed. The company, which provides access to Nvidia graphics processing units for artificial intelligence training and workloads, had planned to sell shares for between $47 and $55 each. At the top end of the range, that would've valued CoreWeave at about $26.5 billion, based on Class A and Class B shares outstanding. The offering is down from 49 million shares to 37.5 million, according to a source familiar with the matter who asked not to be named because the announcement hasn't been made public yet. Bloomberg was first to report on the $40 price. At that level, CoreWeave's valuation will be closer to $19 billion, though the market cap will be higher on a fully diluted basis. Earlier on Thursday, CNBC reported that Nvidia, one of CoreWeave's largest shareholders, was targeting a $250 million order at $40 per share. CoreWeave's shares are set to start trading on the Nasdaq on Friday under the ticker symbol "CRWV." The IPO is a major test for tech startups and the venture capital market after an extended lull in new offerings dating back to the beginning of 2022, when soaring inflation and rising interest rates pushed investors out of risky assets. Other tech-related companies that have filed to go public in recent weeks include digital health startup Hinge Health, online lender Klarna and ticketing marketplace StubHub. Bloomberg reported on Wednesday that chat app maker Discord is working on an IPO. The last venture-backed tech company that raised at least $1 billion for a U.S. IPO was Freshworks in 2021. Last year Reddit and Rubrik each raised about $750 million in their offerings. After Donald Trump's election victory in November, Goldman Sachs CEO David Solomon said he expected renewed IPO activity, but President Trump's imposition of tariffs in recent weeks added uncertainty to economic forecasts and led to increased volatility to tech stocks. CoreWeave counts Microsoft as its biggest customer by far. Other clients include Meta, IBM and Cohere. Revenue soared more than 700% last year to almost $2 billion, but the company recorded a net loss of $863 million. CoreWeave's model is capital intensive, requiring hefty purchases of equipment and expenditures on real estate. A week after filing to go public, CoreWeave announced a contract with OpenAI worth up to $11.9 billion over five years. OpenAI agreed to buy $350 million in CoreWeave stock as part of the deal. CoreWeave is trying to compete with some of the biggest tech companies in the world, including Amazon, Microsoft and Google, the three leading providers of public cloud infrastructure in the U.S.

CoreWeave set to begin trading

Artificial intelligence cloud provider CoreWeave is set to make its Nasdaq debut on Friday. The company priced shares at $40 in its initial public offering on Thursday, raising $1.5 billion. As a supplier to OpenAI, CoreWeave is among the beneficiaries of the rise of generative AI software such as the San Francisco AI startup's ChatGPT assistant, which launched in late 2022. Microsoft provided cloud services to OpenAI but quickly called in CoreWeave, which rents out access to its hundreds of thousands of Nvidia graphics processing units, to provide additional capacity. In 2024, 62% of CoreWeave's $1.92 billion in revenue came from Microsoft. But Microsoft is also a competitor, as are Amazon, Google and Oracle. Few technology companies have joined stock exchanges since late 2021, when investors became more cautious about inflation, leading central banks to raise interest rates. That in turn made unprofitable companies less attractive. There were been just 13 venture-backed technology IPOs in 2022, 2023 and 2024, compared with 77 in 2021, according to data from Jay Ritter, an emeritus professor of finance at the University of Florida.

CoreWeave CEO says debt is 'the fuel for this company'

"The debt is the engine, it's the fuel for this company," Intrator said. "We go out, we find great contracts with great counterparties that need massive scale computing to drive their business, and then we go ahead and we go back to our syndicate of lenders, and they give us the debt to stand up the clusters that will deliver revenue to the company." The IPO debuted on a tough day for the indexes, especially for tech stocks, whose losses helped the Nasdaq Composite plunge 2.7%. CoreWeave, which sells artificial intelligence technology in the cloud, opened at $39 and closed flat at $40, raising $1.5 billion in its share sale. It's the biggest tech IPO in the U.S. since 2021, even as the company set its share price at $40, lower than the previously expected range of $47 to $55. Intrator told CNBC the lower pricing was "where the buying interest was" and claimed there are "a lot of headwinds in the macro." CoreWeave has raised almost $13 billion in debt, CNBC reported, much of which is for GPUs in the company's leased data centers in the U.S. and abroad. Intrator told Cramer that debt on the balance sheet is offset by a larger revenue contract. Ahead of its market debut, the AI outfit bought 250,000 of Nvidia's graphics chips. Many of them are from the Hopper generation, models that were scarce and in demand over the past few years. There are concerns that these products will lose relevancy in the quickly-advancing world of AI - and Nvidia has already started shipping out the model's successor, Blackwell. Intrator refuted those concerns and highlighted the company's recent deal with OpenAI for just under $12 billion, which he said was executed for five years with two one-year extensions. Deals like this, he said, indicate that companies believe the infrastructure will have value far into the future. "Those same buyers will come back, they will buy new infrastructure that is the most cutting edge for their next models," he said. "And then they'll take this, this earlier infrastructure and use it for other use cases in their company that requires really large bulk compute."

CoreWeave CEO says lower IPO pricing was 'where the buying interest was'

Watch CNBC's full interview with CoreWeave co-founder and CEO Mike Intrator CoreWeave CEO Mike Intrator said Friday that the company's IPO pricing, which came in below expectations, has to be placed in the larger context of the macroenvironment. "There's a lot of headwinds in the macro," Intrator said on CNBC's Squawk Box. "And we definitely had to scale or rightsize the transaction for where the buying interest was." The company, which provides access to Nvidia graphics processing units for artificial intelligence training and workloads, priced its IPO at $40 a share, below the initial $47 to $55 per share filing. The stock will begin trading on the Nasdaq under the symbol "CRWV." "We believe that as the public markets get to know us, get to know how we execute, get to know how we build our infrastructure, get to know how we build our client relationships and the incredible capacity of our solutions, the company will be very successful," he said. Nvidia is anchoring the deal with a $250 million order, CNBC reported Thursday. CoreWeave raised $1.5 billion at the $40 per share price, giving it a non-diluted valuation of around $19 billion.

CoreWeave shares slump nearly 10% in second day of trading

Trump was supposed to unlock IPO market, but CoreWeave debut reflects ongoing skepticism Many had hoped that President Donald Trump's victory would usher in a more favorable setup for IPOs, but new tariffs have triggered economic uncertainty and sapped interest in technology stocks. The tech-heavy Nasdaq Composite was down more than 10% year to date. The company, however, joins a growing list of tech-related companies that have recently filed to go public, including Klarna and ticket reseller StubHub. CoreWeave had initially set its price target on shares at $47 to $55, which would have raised about $2.5 billion at the middle of the range. The company downsized the offering to 37.5 million shares from 49 million. "There's a lot of headwinds in the macro," CoreWeave CEO Michael Intrator said on CNBC's "Squawk Box" on Friday. "And we definitely had to scale or rightsize the transaction for where the buying interest was." CoreWeave rents out access to hundreds of thousands of Nvidia graphics processing units to other large tech and AI companies including Meta, IBM and Cohere. Its most significant customer is Microsoft, which accounted for 62% of the company's revenue last year. Microsoft, Amazon, Google and Oracle are among the company's most significant competitors. The company was originally known as Atlantic Crypto when it was founded in 2017. It previously offered infrastructure for mining the ethereum cryptocurrency but snatched up additional graphics processing units and changed its name and focus toward artificial intelligence as digital asset prices fell.

CoreWeave Disappoints on Opening of Trading

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. Shares of CoreWeave, the first artificial intelligence start-up to go public, opened their first day of trading on Friday at $39. That was down slightly from the initial public offering price of $40, which CoreWeave set a day earlier after reducing the size and value of its I.P.O. The company's share price, trading under the ticker symbol CRWV, signaled concern among Wall Street investors about the economy and CoreWeave's business model. The fall came amid a slumping stock market and uncertainty around inflation and President Trump's tariffs. And the listing's reduced price -- CoreWeave estimated a range of $47 to $55 in earlier filings -- already reflected skepticism from investors compared with a month ago. The company's share price increased about 1 percent in early trading. CoreWeave, which runs data centers that help power giant A.I. systems, also raised just $1.5 billion in the offering, less than the $4 billion that analysts had anticipated. In an interview on Friday, Michael Intrator, CoreWeave's chief executive, said that concerns about the stock market and the A.I. industry had caused the company to reduce its listing, but that the timing of its offering would still benefit the company in the long run. "This is just a day, and we'll get through this day, and we'll keep moving," Mr. Intrator said. "Getting into the public markets is what matters for us." It is unclear if the stock's performance will signal the start of the I.P.O. parade that some investors hoped it would. Among the companies watching CoreWeave's public debut on Friday were Klarna, the online lending service, and StubHub, the ticketing company, which are both anticipating public listings this year. "This is not an easy I.P.O. market," said Samuel Kerr, the head equity capital market analyst at Mergermarket, a financial insights firm. "It shows you that the U.S. I.P.O. market is not as strong as perhaps even CoreWeave thought it was going to be at the beginning of the year." A more ideal time for CoreWeave's public listing would have been toward the end of last year, after Mr. Trump was elected but before the stock market correction and release of a new chatbot by the Chinese A.I. company DeepSeek, Mr. Kerr added. It hasn't helped that the stock price of Nvidia, the supplier of CoreWeave's computer chips and one of its main investors, has reeled in the last week, down 9 percent since Wednesday. Some analysts remain skeptical of CoreWeave's considerable debt, which it took on to build more data centers, the large facilities that house its A.I. chips. While the company's revenue jumped to $1.9 billion last year from $229 million a year earlier, it lost $863 million after spending nearly $1 billion to finance its debt. "The very high debt profile is something that I.P.O. investors have really disliked for quite a long time," Mr. Kerr said. CoreWeave was founded as a cryptocurrency mining start-up in 2017, but it shifted to using its powerful Nvidia chips for A.I. development after OpenAI released the ChatGPT chatbot in 2022. Among CoreWeave's customers are Microsoft, which accounted for most of its revenue last year, and OpenAI, which announced a nearly $12 billion deal with CoreWeave in the weeks leading up to its I.P.O.

CoreWeave Is at the Center of the AI Revolution, and Its IPO looks Like a House of Cards

GPUs are coming down in price, and AI is becoming more efficient just as CoreWeave goes public. Today, CoreWeave began trading on the stock market, and it is looking like an inauspicious start for the AI sector. The company had initially hoped to sell shares for $47 to $55 a piece, but began trading at $39 despite being propped up by Nvidia with a massive $250 million order at $40 per share. When you look under the hood, CoreWeave is a dog of a company, with business fundamentals that raise a lot of questions, explaining the less than enthusiastic demand by investors. CoreWeave in recent years found itself in something of an enviable position. Starting out in 2017, it bought GPUs to supply to the cryptocurrency mining industry, only to pivot to AI when that became the hot new trend. CoreWeave is fundamentally a picks and shovels business: It supplies GPUs to an industry that has desperately sought them. The most immediate concern, though, is that the industry does not need them as much today. CoreWeave is going public just as its biggest customer, Microsoft, has pulled back on spending in AI infrastructure, releasing its leases on data centers globally and allowing OpenAI to find other partners. Chips were suddenly in huge demand after OpenAI launched ChatGPT in 2023, but the supply shortage seems to be subsiding in a way that could be bad for CoreWeave. From the Wall Street Journal: The supply shortage has since subsided, and companies say it’s comparatively easy to buy the required chips. Renting a GPU for an hour cost about $5.50 in mid-2023; it’s now $1.55, said Evan Conrad, chief executive of San Francisco Compute, a market for GPUs. To put into context the risk here, Microsoft accounted for a whopping 62% of CoreWeave’s revenue in 2024. But it has declined optioning a further $12 billion in infrastructure, which had to be taken by OpenAI instead. Furthermore, Nvidia has been a major backer of CoreWeave, only to have the money come straight back as CoreWeave used the money to buy Nvidia GPUs, accounting for 6-7% of Nvidia's business. Being propped up by just two companies, Microsoft and Nvidiaâ€"the former of which is cooling on AIâ€"does not seem like a position of strength. Even worse, CoreWeave is suffocating under a heavy debt burden. Despite bringing in $1.9 billion in 2024 revenue, CoreWeave burned $6 billion last year and $1.1 billion the previous year because of the heavy expenses to build out its AI infrastructure. It has raised eyebrows in the past over carrying nearly $8 billion in debt and using the GPUs themselves as collateral, which certainly seems concerning as GPU prices decline and more efficient AI models require less resources. At the very least, CoreWeave is expected to raise around $1.46 billion in the public offering that will allow it to pay down some debt. If CoreWeave continues to underwhelm in the days and weeks to come, that could cause problems for other AI companies hoping to go public. And they need it, tooâ€"investors demand returns, especially as few companies went public in recent years. CoreWeave, if anything, could be seen as the first barometer of current market stress for GPUs. Nvidia CEO Jensen Huang and others in the industry have argued that new "thinking" models require more resources, and as more consumers use AI, the demand for GPUs could continue to rise for years to come even as models become more efficient. But again, these are picks and shovels businesses; of course they will say you need more picks and shovels. OpenAI's Sam Altman posted on X yesterday that demand for ChatGPT's new image generator was "melting" GPUs. Whether that was a short-lived fad as people made novelty Studio Ghibli knockoffs, or something more sustainable, remains to be seen. Either way, there is no doubt that CoreWeave seems to be on particularly shaky ground. What happens as chip prices continue to decline and major tech giants build their own Nvidia competitors in-house? Why then would CoreWeave be a $32 billion company, as it is expected to be valued on the first day of trading? And what if the AGI boom does not come to pass? This company has been propped up by excessive hype over the past two years, selling picks and shovels, before any other critical AI company has gone public and proven these products are more than glorified next-word predictors with the reliability of an unpaid intern. "None of these companies are making any profit off of generative AI, and outside of OpenAI, there really isn't the demand for these services," said Ed Zitron, a public relations expert and host of Better Offline. "If there was, Microsoft wouldn't have just pulled out of 2GW of future compute capacity."

CoreWeave Shrinks IPO

That IPO market comeback may be a little slower than many hoped. Cloud computing startup CoreWeave is cutting the size of its IPO, per a report from Semafor. The startup, which gives customers access to data centers and Nvidia chips for artificial intelligence, will look for a valuation closer to $23 billion than the roughly $30 billion it had originally targeted. CoreWeave will now look to sell 37.5 million shares and price them below the range at $40 apiece -- raising about $1.5 billion, per Reuters. It had been originally reported CoreWeave was seeking to sell 49 million shares in the offering priced between $47 and $55 each to raise as much as $2.7 billion. It also has been reported Nvidia is looking to anchor the IPO with a $250 million order. CoreWeave filed for its Nasdaq IPO earlier this month. The filing follows a period of sharp growth for the 8-year-old company, which posted revenue of $1.9 billion in 2024 -- up an astonishing 737% from the prior year. However, the company is not profitable. Last year, CoreWeave posted an $863 million net loss, up 45% year over year. What it means CoreWeave's IPO has been looked at as a bellwether for the expected thawing of the IPO market, which has been in an extended dry spell. However, there seems to be growing concern about how quickly AI adoption will happen for many large companies and how much they are willing to allocate to data center spend. There is also worry that with so many data centers being built, supply could outstrip demand and lessen prices. CoreWeave has raised $1.57 billion in equity funding, along with over $10 billion in debt financing, per Crunchbase data. Evanston, Illinois-based asset manager and structured credit investor Magnetar Capital is CoreWeave's largest stakeholder, with 34.5% of its outstanding Class A shares. Other large stakeholders include Fidelity (7.6%) and Nvidia (6%).

CoreWeave Dips In First-Day Trading

CoreWeave opened slightly lower in its Nasdaq debut today, with shares hovering around $39 in initial trading. The day before, the Livingston, New Jersey-based cloud-based AI infrastructure company priced shares at $40 each, raising a reported $1.5 billion. Shares priced below the projected range of $47 to $55 per share laid out in a filing last week. CoreWeave filed for its Nasdaq IPO earlier this month. The filing follows a period of sharp growth for the 8-year-old company, which posted revenue of $1.9 billion in 2024 -- up an astonishing 737% from the prior year. However, the company is not profitable. Last year, CoreWeave posted an $863 million net loss, up 45% year over year. CoreWeave's IPO has been looked at as a bellwether for the expected thawing of the IPO market, which has been in an extended dry spell. However, there seems to be growing concern about how quickly AI adoption will happen for many large companies and how much they are willing to allocate to data center spend. There is also worry that with so many data centers being built, supply could outstrip demand and lessen prices. CoreWeave has raised $1.57 billion in equity funding, along with over $10 billion in debt financing, per Crunchbase data.

CoreWeave CEO calls IPO a "victory" despite shrunken size

Why it matters: The offering was seen as a bellwether, both for the health of the IPO market and the AI infrastructure segment -- which has seen dramatic growth, but also hints that capacity may be getting ahead of demand. Driving the news: CoreWeave, which rents the graphics chips needed to run many AI tasks, started trading Friday after selling 37.5 million shares at $40 a piece. What they're saying: "It would be silly to say we didn't want it to go larger or we didn't want [the stock price] to go higher," CEO Mike Intrator told Axios. But, he said, going public is key to having reliable access to the consistent funding the company needs to build out the computing infrastructure that clients are after. Yes, but: There have been mixed signals on the demand for that kind of AI infrastructure, with reports Microsoft is scaling back its plans with CoreWeave, and for its own data centers.

CoreWeave's Huge IPO Is Becoming a Disaster, Spelling Trouble for the AI Industry

Image by Bruno de Carvalho / SOPA / LightRocket via Getty / Futurism The AI industry has been a roller coaster ride, to put it lightly. Selling promises of an automation revolution, startups and established tech giants alike have courted billions in funding to fuel AI development. That's led to early-adoption disasters, Wall Street burnouts, and a huge drop in support for AI from businesses around the globe. Now, the sector faces its toughest challenge yet: the first ever pure-play AI startup to go public, CoreWeave. Once an unknown player in the AI space, CoreWeave's basic pitch is to provide processing infrastructure to AI companies. The startup rose to prominence on the back of deep-pocketed tech investors like Mark Klein, whose $25 million stake started an avalanche of investments from tech firms, hedge funds, and venture capitalists. To those financiers, CoreWeave represents the "picks and shovels of the AI universe," making this IPO a bellwether for future AI public offerings, as well as the health of the turbulent tech market more broadly. Though investors hope CoreWeave is to the AI revolution what Levi's jeans were to the gold rush, the reality is looking closer to the disastrous WeWork IPO. Initially meant to go public last week at a valuation of $35 billion, CoreWeave has since stalled its bid and signaled interest in dramatically scaling back its value. It's now cutting its share prices down to the tune of a $23 billion valuation, according to Semafor, which notes that the company's stock will begin trading tomorrow. However, a quick peek under the hood reveals a company that's far from ready for an IPO, let alone one this size, let alone one with the future of an entire industry riding on it. As tech critic Ed Zitron notes, the company's form S-1 -- something of a body cavity search companies have to file before going public -- is damning, revealing a company whose future depends on "explosive growth" in the AI industry, and whose present is propped up by a single customer. "CoreWeave's S-1 tells the tale of a company that appears to be built for collapse, with over 60 percent of its revenue dependent on one customer, Microsoft," writes Zitron. Though that kind of tie-in with a tech monopoly could have benefits for a young company like CoreWeave, it also comes with huge risks, not least of which is that Microsoft cancels its contract and leaves it for dead. That risk looked a little too real earlier this month, when the Financial Times reported that Microsoft had withdrawn from a number of formal agreements with the AI infrastructure company due to delivery problems and missed deadlines. CoreWeave has since denied that the tech giant reneged on any of its contracts, though that doesn't change the fact that Microsoft is slashing data center leases across the US and Europe. Any hope investors have for CoreWeave's longevity is now riding on a recent OpenAI partnership and an eleventh-hour cash injection by Nvidia -- the microchip giant that desperately needs this IPO to work -- to stay afloat long enough for the "AI revolution" to play out. How it all goes tomorrow is anyone's guess. As Zitron notes, the entire venture is built on the dream that generative AI will become both a massive, profitable industry, and one that depends on massive data processing centers to thrive. That dream is looking more elusive by the day, as China's DeepSeek model squashes support for the kind of AI development CoreWeave represents, and AI profits largely remain a fantasy. With everything riding against it, CoreWeave should applaud itself for getting this far. As Zitron puts it: "if this company was in any other industry, it would be seen as [utterly rancid]. Except, it's one of the standard bearers of the generative AI boom, and so, it exists within its own reality distortion field. "

AI's "Biggest Test" Is Turning Into a Catastrophe as CoreWeave Flounders

So far, the AI industry has enjoyed smooth sailing. It's courted billions in slap-happy investments and sign-first, read-later contracts, ballooning some Silicon Valley companies to the top of the financial food chain. Now it's facing its toughest challenge yet in the form of CoreWeave, the AI processing company that went public on the stock market this week and the first all-AI startup to do so. It was said to be a major test for the industry -- and so far it's failing, miserably. CoreWeave stocks hit the public market with a wet thud on Friday, opening at $39, down slightly from its IPO price of $40 per share, which was already reduced from the highest projection of $55 per share the previous week. The company's hopes of raising $4 billion in the offering thus fell way short at a soggy $1.5 billion. That flat opening helped spurn a rough day for the Magnificent 7 -- the term used to describe Google, Nvidia, Amazon, Tesla, Meta, Apple, and Microsoft -- which all tumbled following announcements of Donald Trump's auto tariffs. Nvidia, the chip giant that's tried to prop up CoreWeave, saw its stock price fall 1.5 percent on Friday, after a 2.1 percent fall on Thursday. Apple, meanwhile, fell 2.5 percent, while Amazon tumbled 4.5 percent, and Tesla dived 3.7 ahead of worldwide protests aimed at CEO Elon Musk. Though CoreWeave isn't entirely to blame for the M7's terrible rotten day, its failure to instill faith in the tech industry and stave off mounting losses still feels like a big deal. The company's entire business model hinges on the mass adoption of generative AI -- a resource-intensive technology whose main impact so far has been polluting the internet with computer generated slop. If CoreWeave does well, it would be a major boost for the tech industry, kicking off even more demand for chips and a wave of AI IPOs. However, if CoreWeave can't survive despite the massive contracts it has with Microsoft, OpenAI, and Nvidia, then investors will have little reason to trust the generative AI hype going forward -- something many have questioned after the Chinese AI company DeepSeek suggested a sustainable alternative to US AI development. And unfortunately for American AI hopefuls, there's little reason to think CoreWeave can hold out the next six months, let alone lead the AI revolution. As tech critic Ed Zitron notes, CoreWeave is a company primed for disaster. Its business is far from stable, relying on those huge revenue injections over sustainable, diversified income. According to the company's financial filings, 77 percent of CoreWeave's revenue comes from just two customers -- meaning the company could collapse like a house of cards if just one of its clients cancels a contract. Meanwhile, it has what Zitron calls a "fatal amount of debt" via loans from companies like Blackstone and Magnetar. The interest alone on CoreWeave's top two loans could be as much as $1.5 billion per year thanks to some high-risk terms, suggesting a lack of faith from the company's lenders. All told, it's a pretty lame showing given all the hype we've heard from AI tycoons. The next few months will tell whether they can keep CoreWeave -- and the AI industry -- afloat as the market grows impatient with empty promises.

Does CoreWeave's disappointing IPO signal an AI bubble?

New Jersey-based AI and cloud computing company CoreWeave made its market debut on Friday to little applause. The stock was poised for success by all means: It was the biggest tech IPO since software company UiPath (PATH-3.74%) in 2021, and a rare IPO of a pure-play AI company. Plus, it was backed by market-favorite tech giant Nvidia (NVDA-1.83%), which ended up having to anchor the IPO last minute with a $250 million order. But things didn't pan out as expected. The company had initially targeted a $2.7 billion raise but ended up coming in at $1.5 billion instead. The shares priced at $40, well below the $47 to $50 price range expected previously, and started trading on Friday at $39. On Monday, the stock's second day of trading, the shares were down almost 10% in midday trading. CoreWeave is a cloud computing company that provides GPU infrastructure to major tech names like Microsoft (MSFT-1.36%) and Meta (META-0.28%). The company primarily uses Nvidia's GPUs to run these data centers. Due to the costly nature of the business, CoreWeave relies on accumulating debt to build its capacity, relying on future demand for AI computing power. CoreWeave is considered a pure-play AI company because the company's success bets directly on the future of AI demand growth. Most pure-play AI companies -- like OpenAI, which kicked off the AI craze in 2022 with ChatGPT -- are privately held and don't publicly disclose finances, which makes it tough for investors to have a gauge on the industry as a whole. CoreWeave's market debut was seen by many as a way to understand how the AI trade was going amidst rising fears of an AI bubble. Some industry experts think the stock's disappointing IPO should be an indicator that the hype is subsiding. "[If] a year ago CoreWeave had gone public, the words 'AI' and 'Nvidia' would have been enough to carry it over the line. The fact that it's not able to do it now is an indicator that the momentum of just trading based on the words AI or Nvidia are not working anymore," NYU Stern School of Business professor of finance Aswath Damodaran told CNBC last week, adding that he thinks that's healthy and that AI has been hyped a bit too much. "The AI product and service business, which ultimately is what has to pay for all of this, has not taken off in any substantial way. I mean, I'm hard pressed to think about any company making significant money from the AI product and service business," Damodaran said. For its part, OpenAI expects revenue to more than triple by the end of this year, according to revenue expectations reported by Bloomberg last week, but the company doesn't anticipate to be cash-flow positive until 2029. Market skepticism of the AI trade began late last year, Damodaran said, and accelerated when Chinese AI startup DeepSeek rattled markets by unveiling a reasoning model that rivaled OpenAI's for less cost and energy earlier this year. What happened last week with the CoreWeave IPO, Damodaran says, is the market recognizing that "too much money" has been spent "too far in advance of the actual evidence that the market exists." "I think we're at that moment in the AI business where we're looking for some evidence that AI product and service business will be trillions of dollars rather than hundreds of millions of dollars," he said. Not all experts agree that the IPO's disappointment has a direct correlation with the power of the AI trade, though. "While the CoreWeave IPO clearly did not go well, it should not be taken as an indication of the strength of the market for AI," D.A. Davidson analyst Gil Luria told Quartz. Luria thinks that CoreWeave is "a little more than a highly leveraged off balance sheet arrangement for Nvidia," pointing to Nvidia's decision to bail out the company's IPO. CoreWeave's leveraged spending helps fuel Nvidia's GPU sales without putting any direct financial risk on Nvidia. In an initiation note last week, Luria said CoreWeave's debt-based business model can only be sustainable as long as demand for AI grows "faster than hyperscalers are able to build data centers," making CoreWeave a risky investment as is. Regarding speculations of whether or not AI is in a bubble, Luria makes an analogy to the 2008 financial crisis, in which collateralized debt obligations (CDOs) -- particularly, subprime mortgages -- played a huge role in creating a housing bubble. "If AI was a CDO, we see CoreWeave as the sub-prime tranche," Luria wrote. D.A. Davidson currently has a neutral rating on the stock. "The importance of AI to the future path of technology transcends any one company, and is definitely bigger than CoreWeave," Luria told Quartz.

CoreWeave's Stock Now Spiking After Disastrous IPO

AI hyperscaler CoreWeave's initial public offering was meant to serve as a litmus test for the industry. The firm went public on the stock market last week, becoming the first all-AI startup to have done so. It's hard to read the tea leaves over such a short period, but at first, it looked like the company -- and industry, if CoreWeave is a bellwether -- was in for rough times ahead. After opening at $39, slightly below its IPO price of $40, shares slid almost ten percent in just its second day of trading on Monday. But on its third day today, the stock seemingly shook off the gloom and spiked over 20 percent before settling around 18 percent by midday. It's a significant change of course, bucking the narrative that the first tech IPO since 2021 was a catastrophe. Still, reality bites. The AI cloud provider was hoping to go public at $47 per share, but downsized the offering over the days leading up to the IPO, raising concerns over a "disastrous" AI bubble. As of midday Tuesday, CoreWeave's shares are hovering around the $44 mark. CoreWeave's offering was the biggest tech IPO in four years, with inflation and rising interest rates disincentivizing investors from betting on riskier offerings until now, as CNBC reported earlier this week. As such, it's attracting outsize attention as the industry faces major losses. AI companies are still pouring hundreds of billions of dollars into the buildout of data center infrastructure to support increasingly power-hungry AI models. A possible return on investment years down the line seems as tenuous as ever, with tech CEOs warning of slumping demand while the supply side surges ahead. Trump's escalating tariff war has also put a major damper on investor enthusiasm due to surging economic uncertainty. However, CoreWeave's rally today shows a much-needed glimmer of hope for the AI industry. CoreWeave is tied up with a number of major players in the AI space, including Microsoft, OpenAI, and Nvidia. But whether it will be able to keep the current momentum going and survive for long on the public stock market remains to be seen. Especially following Chinese AI startup DeepSeek's emergence earlier this year, investors are growing wary of the enormous capital expenses. The firm's highly efficient model, which was trained at a fraction of the cost of its competitors at OpenAI and Google, punched a $1 trillion hole in the tech sector last month, with spooked investors wondering whether they had grossly overpaid for conventional models. Could CoreWeave's latest rally be indicative of renewed optimism -- or is it symptomatic of a highly volatile stock that could still fall victim to Trump's highly unpredictable and self-defeating economic policymaking and growing market uncertainty? Chances are the firm's share price could still be in for a rollercoaster ride in the days ahead as investors try to make sense of what an entirely AI-centered industry being publicly traded on the stock market actually looks like.

CoreWeave's IPO priced lower than expected, at $40 per share, valuing it at $19B - SiliconANGLE

CoreWeave's IPO priced lower than expected, at $40 per share, valuing it at $19B CoreWeave Inc.'s initial public offering is in the balance after it revealed it's pricing its shares at just $40, much lower than was originally anticipated. The cloud computing infrastructure company will raise $1.5 billion in the sale, making it the biggest U.S. tech offering to appear since 2021. CNBC reported that CoreWeave, which provides access to cloud-based graphics processing units for artificial intelligence workloads, had first targeted a price of between $47 and $55 per share. That would have valued it at around $26.5 billion based on the number of Class A and Class B shares outstanding. However, the offering has been reduced from 49 million shares to just 37.5 million, according to one anonymous source quoted by Bloomberg, which was the first to report the $40 price. It means CoreWeave's valuation will be closer to $19 billion, though its market capitalization will remain higher on a fully diluted basis. According to CNBC, CoreWeave has still managed to attract some prestigious backers at that price, with Nvidia Corp. reportedly set to buy up $250 million worth of shares at the $40 price. CoreWeave's stock will begin trading on the Nasdaq exchange on Friday morning under the "CRWV" ticker symbol. The company had been hoping to capitalize on the rising demand for AI computing resources and the broader trend that has seen investors throw billions of dollars at AI startups. Buoyed by its close proximity to a number of AI industry leaders, CoreWeave highlighted in its IPO prospectus how its revenue had jumped seven-times in the last year. But as investors looked more closely at the company's business model, a number of concerns emerged. The company is reliant on two major customers that account for 77% of its total revenue, and it has estimated that it will need to spend billions of dollars in capital to keep up with Nvidia's two-year GPU refresh lifecycle. A report by London's Financial Times earlier this week dented CoreWeave's prospects when it said that Microsoft, which provides around two-thirds of its revenue, had gone back on some of its commitments due to issues around delivery and deadlines. CoreWeave pushed back, saying the report was "false and misleading", but it only intensified concerns some investors have that big technology companies may be overspending on AI. In the last few weeks, several analysts have noted that Microsoft appears to be scaling back on its data center investment plans. And last month, Amazon Web Services Inc., the biggest cloud infrastructure company of all, also appeared to reduce some of its near-term spending plans. Investors also noted that CoreWeave's capital spending plans cannot be funded by its existing revenue, even after it added OpenAI as its third major customer earlier this month. It's currently sitting on a $12 billion debt, and that is expected to grow to about $21 billion by the end of the year. Writing in his column in The Information, the financial market analyst Cory Weinberg revealed that investors he's talked to have shared concerns regarding the proportion of CoreWeave's revenue that's tied to Microsoft and Nvidia. There are other alarm bells too. "They worry about CoreWeave's founders having sold so much stock already," Weinberg wrote. "They worry about how much cash the company expects to burn." EquityZen analyst Phil Haslett told The Street there are also concerns about the broader macroeconomic uncertainties in the economy, plus questions about the strength of AI demand, putting the onus on CoreWeave to tell a more convincing story to investors. "It's a unique business model that needs to find the right positioning," Haslett said. "Hyperscalers may decide to build out their own infrastructure (like Meta Platforms), but smaller tech companies could still need a scalable solution (that CoreWeave provides)." CoreWeave's decision to lower both its share price and the number of shares it plans to sell may be an attempt to find that positioning. But although the lower price may make its stock seem more enticing, it's not clear if it will be low enough to convince market naysayers, and apparently there are a lot of them. In his column, Weinberg said he had read the results of a confidential survey of 135 investors from an investment bank not involved in the IPO. It revealed that 90% of respondents didn't believe CoreWeave had a "sustainable moat", meaning they don't consider it a sustainable long-term investment. "One respondent summed up a broader perception about CoreWeave: "It's radioactive, and I think every investor knows that."," Weinberg wrote. As such, there's a lot of uncertainty over the direction CoreWeave's stock will head when it starts trading on Friday, with many analysts predicting that it could end up being a spectacular flop. Its debut will be watched keenly by the wider tech industry, for the IPO is seen as a major test for the market's readiness for a new wave of stock offerings. IPOs have been few and far between since 2022, with rising interest rates and soaring inflation dampening investor enthusiasm for risky bets. The last technology company that raised over $1 billion through an IPO was Freshworks Inc. back in 2021, and last year, both Rubrik Inc. and Reddit Inc. raised around $750 million via their offerings. In the wake of Donald Trump's election victory last November, many analysts said they expect to see renewed IPO activity, but the imposition of multiple tariffs has instead shocked the global economy, creating uncertainty that could dissuade investors from betting on new offerings. A number of technology firms have filed to go public later this year, including the ticketing marketplace StubHub Inc., digital health startup Hinge Health Inc. and the online lender Klarna Group Plc.

CoreWeave, the AI company you've never heard of, is now public with a $23 billion valuation

Today is the initial public offering for one of the most anticipated stock market listings of the year. It's the day when shares in AI infrastructure company CoreWeave, Inc. will begin trading. However, the company's public listing isn't without some last-minute surprises. Here's what you need to know about CoreWeave's IPO. CoreWeave, Inc. hasn't always been known by its current name. The company was originally founded in 2017 as Atlantic Crypto. As its original name suggests, the company operated in the cryptocurrency industry and focused on crypto mining infrastructure using graphics processing units (GPUs), notes CNBC. However, in 2019, the company pivoted and began offering its powerful GPU resources to companies working in the burgeoning AI space. Today, CoreWeave's main business is in providing AI infrastructure to AI companies. It operates data centers across the country that are full of powerful GPUs -- mainly from Nvidia -- and offers the power of those GPUs out to companies over the cloud. In other words, CoreWeave provides the AI hardware infrastructure that AI software companies need. CoreWeave was founded by Mike Intrator, Brian Venturo, and Brannin McBee and is based in Livingston, New Jersey.

CoreWeave prices IPO lower than expected, and its stock still sags on its debut before recovering - SiliconANGLE

CoreWeave prices IPO lower than expected, and its stock still sags on its debut before recovering Shares of CoreWeave Inc. fell more than 5% in their stock market debut Friday morning despite the company downsizing its offer and stock price late Thursday, but by the close it had recouped losses to close 2.5% over the initial trade of $39 a share. Investors had been closely watching CoreWeave Inc.'s initial public offering after it priced its shares at just $40, much lower than was originally anticipated. The cloud computing infrastructure company, which trades under the ticker symbol "CRWV," raised $1.5 billion in the sale Thursday evening, making it the biggest U.S. tech issue since 2021. Its offering was seen as a bellwether for investors' appetite for IPOs, which have been in a deep freeze for years now. CNBC reported that CoreWeave, which provides access to cloud-based graphics processing units for artificial intelligence workloads, had first targeted a price of between $47 and $55 per share. That would have valued it at around $26.5 billion based on the number of Class A and Class B shares outstanding and raised about $1 billion more. However, the offering has been reduced from 49 million shares to just 37.5 million, according to one anonymous source quoted by Bloomberg, which was the first to report the $40 price. It means CoreWeave's valuation will be closer to $19 billion, though its market capitalization will remain higher on a fully diluted basis. According to CNBC, CoreWeave has still managed to attract some prestigious backers at that price, with Nvidia Corp. set to buy up $250 million worth of shares at the $40 price. The company had been hoping to capitalize on the rising demand for AI computing resources and the broader trend that has seen investors throw billions of dollars at AI startups. Buoyed by its close proximity to a number of AI industry leaders, CoreWeave highlighted in its IPO prospectus how its revenue had jumped seven times in the last year. But as investors looked more closely at the company's business model, a number of concerns emerged. The company is reliant on two major customers that account for 77% of its total revenue, and it has estimated that it will need to spend billions of dollars in capital to keep up with Nvidia's two-year GPU refresh lifecycle. A report by London's Financial Times earlier this week dented CoreWeave's prospects when it said that Microsoft, which provides around two-thirds of its revenue, had gone back on some of its commitments due to issues around delivery and deadlines. CoreWeave pushed back, saying the report was "false and misleading," but it only intensified concerns some investors have that big technology companies may be overspending on AI. In the last few weeks, several analysts have noted that Microsoft appears to be scaling back on its data center investment plans. And last month, Amazon Web Services Inc., the biggest cloud infrastructure company of all, also appeared to reduce some of its near-term spending plans. Investors also noted that CoreWeave's capital spending plans cannot be funded by its existing revenue, even after it added OpenAI as its third major customer earlier this month. It's currently sitting on $12 billion in debt, and that's expected to grow to about $21 billion by the end of the year. Writing in his column in The Information, the financial market analyst Cory Weinberg revealed that investors he has talked to have shared concerns regarding the proportion of CoreWeave's revenue that's tied to Microsoft and Nvidia. There are other alarm bells too. "They worry about CoreWeave's founders having sold so much stock already," Weinberg wrote. "They worry about how much cash the company expects to burn." EquityZen analyst Phil Haslett told The Street there are also concerns about the broader macroeconomic uncertainties in the economy, plus questions about the strength of AI demand, putting the onus on CoreWeave to tell a more convincing story to investors. "It's a unique business model that needs to find the right positioning," Haslett said. "Hyperscalers may decide to build out their own infrastructure (like Meta Platforms), but smaller tech companies could still need a scalable solution (that CoreWeave provides)." CoreWeave's decision to lower both its share price and the number of shares it plans to sell may be an attempt to find that positioning. But although the lower price may make its stock seem more enticing, it's not clear if it will be low enough to convince market naysayers, and apparently there are a lot of them. In his column, Weinberg said he had read the results of a confidential survey of 135 investors from an investment bank not involved in the IPO. It revealed that 90% of respondents didn't believe CoreWeave had a "sustainable moat," meaning they don't consider it a sustainable long-term investment. "One respondent summed up a broader perception about CoreWeave: 'It's radioactive, and I think every investor knows that,'" Weinberg wrote. Holger Mueller of Constellation Research Inc. told SiliconANGLE the concerns over CoreWeave's overexposure to Microsoft are justified, but believes there's still a great market opportunity for a dedicated AI cloud platform if it gets the execution right. "Without a firm commitment from Microsoft, it remains a risk, but it might still be worth a shot for some investors," he added. CoreWeave's debut is being watched keenly by the wider tech industry, for the IPO is seen as a major test for the market's readiness for a new wave of stock offerings. IPOs have been few and far between since 2022, with rising interest rates and soaring inflation dampening investor enthusiasm for risky bets. The last technology company that raised more than $1 billion through an IPO was Freshworks Inc. back in 2021, and last year, both Rubrik Inc. and Reddit Inc. raised about $750 million via their offerings. In the wake of President Donald Trump's election victory last November, many analysts said they expect to see renewed IPO activity. But the imposition of multiple tariffs has instead shocked the global economy, creating uncertainty that could dissuade investors from betting on new offerings. A number of technology firms have filed to go public later this year, including the ticketing marketplace StubHub Inc., digital health startup Hinge Health Inc., financial platform eToro Inc. and the online lender Klarna Group Plc.

Below target: Nvidia-backed CoreWeave goes public at $19B valuation

CoreWeave undercut Wall Street expectations by pricing its IPO at $40 a share April 19, raising $1.5 billion -- the largest U.S. tech IPO since 2021. The cloud computing firm, which rents Nvidia GPUs for AI workloads, had initially aimed for $47 to $55 per share, a range that would've valued it at $26.5 billion. Instead, the $40 price tag drops its valuation to roughly $19 billion, though fully diluted equity pushes the market cap higher. Nvidia, CoreWeave's largest shareholder, will buy $250 million in shares at the $40 price, according to CNBC. The offering shrunk from 49 million to 37.5 million shares, Bloomberg reported. Trading begins Friday on Nasdaq under ticker CRWV. The IPO arrives as tech startups and venture capital markets brace for a post-lull comeback. After a two-year drought in billion-dollar tech offerings, rivals like Hinge Health, Klarna, and StubHub have also filed to go public. The last $1 billion+ U.S. tech IPO was Freshworks in 2021; Reddit and Rubrik raised $750 million each last year. Microsoft bails on $12B CoreWeave deal as OpenAI steps in CoreWeave's revenue skyrocketed 700% to nearly $2 billion in 2023, but net losses hit $863 million. Its capital-heavy model demands massive hardware and real estate investments. Microsoft is its top client, followed by Meta, IBM, and AI startup Cohere. A week after filing, CoreWeave inked a $11.9 billion, five-year contract with OpenAI, which also agreed to purchase $350 million in CoreWeave stock. The deal aims to challenge Amazon, Microsoft, and Google in cloud infrastructure dominance. President Trump's recent tariffs on semiconductors and AI chips have added volatility to tech stocks, complicating Goldman Sachs' earlier prediction of a post-election IPO boom. CoreWeave's pricing reflects cautious investor sentiment in a still-treacherous market.

CoreWeave's Splashy IPO Wobbles, But That's Not Stopping Its Founders

CoreWeave's debut onto the NASDAQ Friday was bound to be historic, given that it's the first time a "pure play AI cloud startup" entered the public markets. But what was once viewed as the year's buzziest IPO wobbled amid a volatile market that's considerably chilled on artificial intelligence specifically, and IPOs altogether. The Roseland, New Jersey-based startup, which scales AI and provides access to AI data centers to core clientele like IBM and Meta, witnessed impressive growth from 2023 to 2024, seeing revenue balloon by 737 percent to $1.9 billion. This month alone it inked an $11.9 billion deal with OpenAI to expand AI infrastructure, and acquired the developer platform Weights and Biases. Still that wasn't enough to lift CoreWeave's IPO, set at $40, to the target range of $47 to $55 it had once eyed. The stock, trading under the ticker CRWV, opened at $39 a share on Friday, touched a high of $41.94, and ran flat at market close. "It is an interesting market to set price within," co-founder and chief development officer Brannin McBee tells Inc. "Ultimately you're taking a company from an illiquid private market setting to a liquid market, but frankly, a different investor base is in there as well. There's sometimes a disconnect between financial markets versus what is happening on the ground and the opportunities that we have." He adds: "I think that the most important aspect was to get public and keep moving forward." Forward indeed, with plenty of growth opportunities ahead. The company's ongoing expansion includes opening up more data centers while engaging in its slew of partnerships. But what the company is most looking forward to, McBee says, is scaling Blackwell, the creme de la crème of graphics processing units, from Nvidia. So CoreWeave will work to expand the Blackwell platform to more companies. What's unique about Blackwell, according to McBee, is that it's the first time Nvidia has built AI infrastructure that's heavily dependent on liquid cooling. Liquid cooling is something of a CoreWeave speciality, and it's personal: CoreWeave CEO Michael Intrator once worried the company might burn down its New York City skyscraper in its early days. Another core part of the company's growth is upping the stack, or increasing its vertical interaction capabilities. In other words, CoreWeave argues that all the innovation and investments made by its competition 10 to 15 years ago doesn't pass muster with the infrastructure that modern technology requires. A comparable analogy McBee nods to? If someone approaches Toyota and asks them to produce a Tesla Model Y Vehicle. But a big challenge for the company in McBee's view is "scaling the business at the pace of AI software adoption." And as the U.S. competes against China and rapid AI developments recently seen from the likes of DeepSeek, the pressure increases in multiples. CoreWeave has other challenges too. It is still not profitable, sees much of its revenues dependent on a few major customers, and is bloated with debt. Though the last part is by design, a nod to the adage of it takes money to make money. "All the debt you see in our business that will keep growing is directly connected to our revenue," McBee says. The company's economics boils down to a longer-term view. While upfront costs are high, it takes about two to two-and-a-half years to pay down the cost of infrastructure. But if you're working on contracts that stretch to four or five years, then you move into sweet profitability later on. "Our contracted revenue period is beyond what that shorter payback period is," McBee says. "[W]e're guaranteed to be making profits on this infrastructure."

Nvidia-Backed CoreWeave Prices Its IPO at $40 Per Share, Below Expectations

CoreWeave, a cloud computing company backed by Nvidia (NVDA), priced its initial public offering at $40 per share Thursday, raising $1.5 billion. That is below its expected range of $47 to $55 per share, and CoreWeave offered 37.5 million shares, fewer than the 49 million shares previously anticipated. That would leave the company's valuation at about $23 billion on a fully diluted basis. The stock is set to begin trading Friday on the Nasdaq under the ticker "CRWV." CoreWeave makes money by providing its clients with access to data centers, which are used to develop artificial intelligence models. It was founded as recently as Sept. 2017 as a crypto miner, before pivoting to selling cloud infrastructure. Among the issues raised as risk factors for investors in CoreWeave's IPO, beyond its short history, is its high levels of debt. According to its prospectus, the company owed $8 billion in debt as of the end of last year. Last year, around 32% of its net cash went to servicing that debt. CoreWeave is also dependent on Nvidia's chips for its business and Microsoft (MSFT) for a large portion of its sales. Microsoft represents CoreWeave's biggest client, accounting for 62% of its $1.9 billion in revenue last year, according to its prospectus. The company said it faces stiff competition as well. "The market for AI cloud infrastructure and software is intensely competitive and is rapidly evolving, characterized by changes in technology, customer requirements, industry standards, regulatory developments, and frequent introductions of new or improved solutions and services," it said. Among its key competitors are big firms like Amazon's (AMZN) cloud computing platform AWS, Alphabet's Google (GOOGL) cloud platform, International Business Machines (IBM), Microsoft's Azure, and Oracle (ORCL), some of which are customers. It said it also competes with smaller cloud service providers such as Crusoe and Lambda. CoreWeave reported a net loss of $863 million on revenue of $1.9 billion in 2024, which the company attributed to investments in its business.

What's wrong with Nvidia-backed cloud services provider? Report claims CoreWeave plans to reduce US IPO

CoreWeave and some existing investors had initially aimed to sell 49 million shares in the offering priced between $47 and $55 each to raise as much as $2.7 billion.CoreWeave plans to reduce the size of its U.S. initial public offering and price the shares below range, a person familiar with the matter told Reuters on Thursday, as per a report. The Nvidia-backed cloud services provider is now looking to sell 37.5 million shares and price them below the range at $40 apiece, the source added, requesting anonymity discussing confidential information. The sale would fetch up to $1.5 billion, Reuters reported. The listing is being closely watched as a test for the fragile U.S. IPO market and a gauge of whether investor enthusiasm for AI newcomers remains strong or is waning. CoreWeave and some existing investors had initially aimed to sell 49 million shares in the offering priced between $47 and $55 each to raise as much as $2.7 billion. The company did not immediately respond to Reuters' request for comment. Despite the AI boom, there are growing concerns that data center spending will be uneven, with investments concentrated among a few giants while others struggle to keep pace. DeepSeek, China's low-cost AI rival, has also emerged as a growing threat, fueling concerns about pressure on data center spending. Nvidia will anchor the CoreWeave IPO at the price, a source close to the matter told Reuters. The downsizing was first reported by Semafor on Thursday. CoreWeave, founded in 2017 as a crypto miner, had initially planned to raise over $3 billion in its share sale at a valuation topping $35 billion, sources told Reuters in November. Morgan Stanley, J.P. Morgan and Goldman Sachs are the lead underwriters of the IPO. CoreWeave aims to trade on the Nasdaq under the ticker symbol "CRWV." Q1. What we know about Nvidia-backed cloud services provider? A1. Nvidia-backed cloud services provider CoreWeave is now looking to sell 37.5 million shares and price them below the range at $40 apiece. Q2. What is DeepSeek? A2. DeepSeek, China's low-cost AI rival, has also emerged as a growing threat, fueling concerns about pressure on data center spending.

US cloud computing firm CoreWeave to raise $1.5 billion in IPO

US cloud services provider CoreWeave said it priced its initial public offering at $40 per share, allowing it to raise $1.5 billion -- in an announcement a day before it starts trading in New York. For now, CoreWeave's share price would be notably lower than a planned range of $47 to $55 each.US cloud services provider CoreWeave said it priced its initial public offering at $40 per share, allowing it to raise $1.5 billion -- in an announcement a day before it starts trading in New York. The company, which was founded in 2017, uses artificial intelligence chip giant Nvidia's graphic processing units to power AI workloads for customers. While its debut marks a major US tech offering, it comes amid a period of stock market volatility. Response to the IPO could also be seen as a sign of investors' confidence levels in the AI infrastructure sector. For now, CoreWeave's share price would be notably lower than a planned range of $47 to $55 each. But at its current level, the company's valuation would be around $19 billion. The New Jersey-based company has lowered the number of shares it would sell too, from 49 million originally announced to 37.5 million. US media reports said that Nvidia was eyeing a $250 million order of new shares. Meanwhile, ChatGPT creator OpenAI had also agreed to buy $350 million in CoreWeave shares, according to an earlier filing. CoreWeave counts among its customers Microsoft -- from which it derives much of its revenue -- alongside Facebook parent Meta and France-based Mistral. CoreWeave is more than 80 percent owned by its three founders, including chief executive Michael Intrator, its prospectus indicated. It posted revenue of $1.9 billion last year, leaping some sevenfold from 2023 on the AI boom, according to the prospectus filed with the Securities and Exchange Commission.

CoreWeave disappoints on opening of trading

CoreWeave, the first AI startup to go public, closed its IPO at $40.01 per share, slightly above its offering price. Market concerns over the economy, inflation, and debt issues affected investor confidence. Michael Intrator, CoreWeave's chief executive said, "This is just a day, and we'll get through this day, and we'll keep moving. Getting into the public markets is what matters for us."Shares of CoreWeave, the first artificial intelligence startup to go public, finished its first day of trading at $40.01 a share, one penny above the disappointing initial public offering price the company had set a day earlier. The company's share price, trading under the ticker symbol CRWV, signaled concern among Wall Street investors about the economy and CoreWeave's business model. The faltering day of trading came amid a slumping stock market and uncertainty around inflation and President Donald Trump's tariffs. The S&P 500 dropped 2% on Friday, one of its worst days since Trump's election. The listing's reduced price -- CoreWeave estimated a range of $47 to $55 in earlier filings -- already reflected skepticism from investors compared with a month ago. The company's trading opened at $39 a share Friday, even after CoreWeave dropped the size and value of its IPO. CoreWeave, which runs data centers that help power giant AI systems, also raised just $1.5 billion in the offering, compared with the $4 billion that analysts had anticipated. In an interview Friday, Michael Intrator, CoreWeave's chief executive, said that concerns about the stock market and the AI industry had caused the company to reduce its listing, but that the timing of its offering would still benefit the company in the long run. "This is just a day, and we'll get through this day, and we'll keep moving," Intrator said. "Getting into the public markets is what matters for us." It is unclear if the stock's performance will signal the start of the IPO parade that some investors hoped it would. Among the companies watching CoreWeave's public debut Friday were Klarna, the online lending service, and StubHub, the ticketing company, which are both anticipating public listings this year. "This is not an easy IPO market," said Samuel Kerr, head equity capital market analyst at Mergermarket, a financial insights firm. "It shows you that the U.S. IPO market is not as strong as perhaps even CoreWeave thought it was going to be at the beginning of the year." A more ideal time for CoreWeave's public listing would have been toward the end of last year, after Trump was elected but before the stock market correction and release of a new chatbot by Chinese AI company DeepSeek, Kerr added. It hasn't helped that the stock price of Nvidia, the supplier of CoreWeave's computer chips and one of its main investors, has reeled in the last week, down 9% since Wednesday. Some analysts remain skeptical of CoreWeave's considerable debt, which it took on to build more data centers, the large facilities that house its AI chips. While the company's revenue jumped to $1.9 billion last year from $229 million a year earlier, it lost $863 million after spending nearly $1 billion to finance its debt. "The very high debt profile is something that IPO investors have really disliked for quite a long time," Kerr said. CoreWeave was founded as a cryptocurrency mining startup in 2017, but it shifted to using its powerful Nvidia chips for AI development after OpenAI released the ChatGPT chatbot in 2022. Among CoreWeave's customers are Microsoft, which accounted for most of its revenue last year, and OpenAI, which announced a nearly $12 billion deal with CoreWeave in the weeks leading up to its IPO.

CoreWeave shares soar past IPO price on third trading day

On Friday, the Nvidia-backed stock debuted at $39, giving the AI infrastructure firm a valuation of $23 billion on a fully diluted basis. CoreWeave had already taken a hit on Thursday when it downsized its IPO.Artificial intelligence startup CoreWeave's shares closed up 42% at $52.57 on Tuesday, their third day of trading, above their initial public offering price of $40. At close, the company added more than $7 billion to its market value. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported last week. Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge," Ethereum's 2022 upgrade, slashed rewards for miners. In its IPO filing earlier in March, CoreWeave reported revenue of $1.92 billion in 2024, compared with $228.9 million a year earlier. Its net loss widened to $863.4 million during the same period from $593.7 million in 2023. Roughly two-thirds of CoreWeave's revenue came from Microsoft, which is the company's biggest customer.

CoreWeave (CRWV) IPO Turns Into An Epic Disaster As NVIDIA Forced To Step In With A $250 Million Anchor Investment

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. We warned in early March that CoreWeave's IPO, one of the most anticipated public flotation events of the year, faced a growing chorus of headwinds, including moderating GPU prices, data center excess capacity risks courtesy of Microsoft's recent retrenchment in this space, and sustainability concerns around CoreWeave's revenue trajectory. Well, all of these factors are now coming to a head just as the company is about to go public. For the benefit of those who might not be aware, CoreWeave is a cloud company that specializes in handling GPU-intensive AI workloads. Over the past few years, the company has carved out for itself a winning niche: it has created a unique partnership with NVIDIA to be among the first to offer access to NVIDIA's latest-gen GPUs at scale, all packaged within an infrastructure that has been optimized to handle AI workloads, replete with "sub-microsecond" network latency and an effective GPU lifecycle management system. Basically, CoreWeave rents out NVIDIA's latest GPUs, packaged with various bells and whistles designed to attract AI startups. This brings us to the crux of the matter. Originally, CoreWeave planned to raise at least $4 billion via an IPO that would value the company at $35 billion. However, in what amounted to an inauspicious start to CoreWeave's IPO day, Semafor reported earlier today that the company was now targeting a $23 billion valuation. Then, reports emerged that CoreWeave could not manage to fill even half of its orderbook and that the company would now raise just $1.5 billion in its IPO instead of its targeted cash raise of $4 billion. Next, CNBC is now reporting that the prevailing situation has compelled NVIDIA to step in with a $250 million investment to anchor CoreWeave's IPO at $40 per share. Of course, TD Cowen's latest note is likely to have played a role in souring the sentiment around CoreWeave's IPO. As a refresher, TD Cowen analyst Michael Elias recently leveraged his channel checks to note that Microsoft's data center lease cancelations are "more pervasive" than previously thought, prompting investors to question the sustainability of the ongoing AI-related CapEx. Specifically, Elias calculated that Microsoft appears to have walked away - via lease deferrals and outright cancelations - from over 2GW of data center capacity in the US and the EU over the past six months. While Elias concedes that Microsoft's decision not to support OpenAI's training workloads might have partially prompted this retrenchment, he goes on to declare that the prevailing paradigm "points to data center oversupply relative to its current demand forecast." Of course, do note that Google and Meta have stepped forward to reclaim some of Microsoft's recently freed data center capacity. Bear in mind that Microsoft was responsible for 62 percent of CoreWeave's revenue in 2024. And, the tech giant previously intended to spend over $10 billion on CoreWeave's services by 2030. Elsewhere, concerns continue to linger around CoreWeave's revenue and cash burn trajectory. The company burned $1.1 billion in cash in 2023, and a whopping $6 billion in 2024, courtesy of its gigantic CapEx to build out AI infrastructure. As of the end of 2024, CoreWeave housed over 250,000 GPUs from NVIDIA across its 32 data centers, with the Hopper architecture constituting the vast majority of these GPUs. Due to its relentless cash needs, CoreWeave has raised $14.5 billion in financing via 12 funding rounds. It currently has a debt load of around $11 billion. Critically, most of CoreWeave's debt stock is secured against its gigantic stash of NVIDIA GPUs. However, with an hour of GPU compute trading at just $2 at the end of 2024 vs. the $8 per hour price tag earlier in the year, some remain concerned about the health of CoreWeave's GPU collateral. CoreWeave does have one thing going for it: consider the fact that its 2024 revenue increased by 737 percent year-over-year to $1.92 billion from just $229 million in revenue that it recorded in 2023. Nonetheless, the company has yet to show a profit, having reported a net loss of $863 million in 2024, and $594 million in 2023.

Nvidia-Backed CoreWeave IPO: 5 Things Investors Need To Know Before Buying Shares - Microsoft (NASDAQ:MSFT)

One of the most anticipated IPOs of 2025 is nearly here. CoreWeave CRWV is set to make its public debut in a test of how much growth investors still see in the artificial intelligence sector. CoreWeave plans to sell 49 million shares at a price between $47 and $55. Of the total shares offered, 47.18 million will come from the company with 1.82 million sold by existing shareholders. Here's a look at five things investors should know about the AI Hyperscaler company ahead of its IPO. Key Customers: CoreWeave is well-known in the AI sector and could have a hot IPO, thanks to a key customer base that includes several of the largest technology and semiconductor companies. "Our CoreWeave Cloud platform consists of our proprietary software and cloud services that deliver the software and software intelligence needed to manage complex AI infrastructure at scale," the company wrote in its IPO filing. CoreWeave lists Cohere, International Business Machines, Meta Platforms, Microsoft Corporation MSFT, Mistral AI, NVIDIA Corporation NVDA and OpenAI as some of its customers. The company gets most of its revenue from multi-year committed contracts, and having this strong base of well-known names could help increase demand for the IPO. Microsoft is highlighted as CoreWeave's biggest customer, making up 35% of revenue in 2023 and 62% in 2024. The company said its three largest customers made up 41% of its revenue in 2022 and 73% in 2023. For 2024, the company's two largest customers comprised 77% of revenue. Going forward, CoreWeave expects Microsoft to represent less than 50% of future committed contract revenue. While having these key customers could be a positive, investors should also know the risk of being too concentrated with one customer. Thanks to a new Master Services Agreement signed earlier this month, OpenAI could become one of the company's largest customers going forward. Under the Agreement, OpenAI will pay up to $11.9 billion through October 2030. Read Also: Nvidia Backed CoreWeave Acquires AI Developer Platform Weights & Biases Nvidia, OpenAI Investments: While Nvidia is listed as a key customer, the semiconductor giant is also one of the largest shareholders of CoreWeave owning 5.96% of the company. After the IPO, the ownership stake is expected to be $5.05% according to the company's filing. Nvidia may increase its ownership stake in the company, thanks to the IPO. CNBC reported Thursday that the semiconductor giant plans to anchor the IPO at $40 per share with a $250 million order. OpenAI is also planning to invest in CoreWeave after the IPO as part of the recently signed master services agreement. In a private placement after the IPO, OpenAI will invest $350 million in the company at a price equal to the IPO price. Triple-Digit Revenue Growth: CoreWeave's revenue was $1.9 billion in 2024, up 737% from the previous year. The company's revenue has increased substantially in recent years, going from $16 million in 2022 to $229 million in 2023 to $1.9 billion in 2024. While the company has had strong revenue growth, CoreWeave still had net losses each of the last three years as it invested back in the company and future growth. The company's net loss was $863 million in 2024. CoreWeave ended the 2024 fiscal year with $15.1 billion in remaining performance obligations, which is future revenue for existing customers. AI Growth: Artificial intelligence has been one of the hottest sectors for companies and investors over the last two years, and CoreWeave's IPO timing and valuation could impact overall perceptions of the sector. "AI represents the new major evolution of technology, and its impact is potentially greater than the transformational shifts of the past," the company said. CoreWeave said a combination of demand and supply side factors are leading to the "unprecedented growth of AI." Demand side factors include the significant advancements of AI, improved outcomes for businesses and individuals from AI and AI becoming a strategic priority for organizations. Supply-side factors include the rapidly growing amount of data, effective foundational models, and evolving infrastructure to enable AI workloads. "We believe that specialized compute infrastructure is the key enabler that AI labs and AI enterprises need to train models, perform inference faster at scale, and accelerate their time to market." CoreWeave says it is purpose-built for AI. The company has 32 data centers and over 250,000 GPUS online. "We believe AI is the next frontier for innovation in technology, driving productivity and efficiency gains and enabling new business models in nearly every industry and organization." Growth Strategies: Another key item found in most IPO filings is a company's growth strategies. This list can include what they will use the proceeds from the IPO for and how they will continue past revenue growth after going public. Here are CoreWeave's growth strategies: Extend our product leadership and innovation Continue capturing additional workloads from existing customers Extend into broader enterprise customers across new industries and verticals Expand internationally Increase our vertical integration Maximize the economic life of our infrastructure Investors will be closely watching to see if CoreWeave's IPO prices at the mid-point of its IPO range or higher and how the stock performs during its first day of trading. Failure to do so could cause these growth strategies to need to happen more quickly to justify the company's current valuation. Read Next: CoreWeave's IPO: 3 Major Red Flags Investors Can't Ignore Photo: Shutterstock MSFTMicrosoft Corp$390.140.04%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum33.97Growth64.80Quality37.13Value14.48Price TrendShortMediumLongOverviewNVDANVIDIA Corp$111.94-1.60%Market News and Data brought to you by Benzinga APIs

Nvidia-Backed CoreWeave's IPO Comes In Below Expectations At $40 Per Share - JPMorgan Chase (NYSE:JPM), Goldman Sachs Group (NYSE:GS)

CoreWeave priced its initial public offering at $40 per share, below the expected range of $47 to $55, signaling investor caution despite demand for artificial intelligence-driven cloud computing services. What Happened: The offering consists of 37.5 million shares, with CoreWeave selling 36.59 million and existing stockholders offloading 910,000 shares. The company granted underwriters a 30-day option to purchase up to an additional 5.63 million shares to cover over-allotments. CoreWeave will trade under the ticker "CRVW" on the Nasdaq Global Select Market. The IPO is being led by Goldman Sachs Group Inc GS, Morgan Stanley MS, and JPMorgan Chase & Co. JPM as the primary book-running managers. Trading is set to begin on Mar. 28, with the offering expected to close on Mar. 31. CoreWeave, an AI-focused cloud computing company, has seen exponential revenue growth, reaching $1.9 billion in 2024 -- a 737% increase from the prior year. However, the company remains unprofitable, reporting a net loss of $863 million in 2024. A key driver of CoreWeave's success is its strategic partnerships and customer base, which includes OpenAI, Meta Platforms Inc. META, Microsoft Corp. MSFT, and Nvidia Corp. NVDA. See Also: Trump Pardons Nikola Founder Trevor Milton, Short Seller Jim Chanos Reacts: 'Please Tell Me This Is A Hoax' Why It Matters: Microsoft accounted for 62% of CoreWeave's revenue in 2024, raising concerns about revenue concentration. However, CoreWeave anticipates that Microsoft's share of future committed contract revenue will decline to below 50%. Nvidia, a major supplier of GPUs for CoreWeave's AI cloud infrastructure, holds a 5.96% stake in the company pre-IPO, with expectations of a slight reduction post-offering. The semiconductor giant has committed to a $250 million anchor investment at the IPO price, while OpenAI plans to invest $350 million through a private placement after the IPO. CoreWeave operates 32 data centers with over 250,000 GPUs dedicated to AI workloads. The company aims to expand its infrastructure, extend its enterprise reach, and pursue international growth, positioning itself as a leading AI hyperscaler amid soaring demand for compute power. Read Next: Warren Buffett Told Students How He Got Rich Without Raising a Dime -- Then Said: You're Already 'Living Better Than John D. Rockefeller' Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. GSThe Goldman Sachs Group Inc$559.50-2.51%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum89.80Growth56.84Quality55.53Value-Price TrendShortMediumLongOverviewJPMJPMorgan Chase & Co$248.12-1.16%METAMeta Platforms Inc$601.30-1.58%MSMorgan Stanley$119.24-2.42%MSFTMicrosoft Corp$389.88-0.02%NVDANVIDIA Corp$111.27-2.19%Market News and Data brought to you by Benzinga APIs

Nvidia-Backed CoreWeave's CEO Defends Microsoft, OpenAI Revenue Concentration Due To 'Mind-Bendingly Large Deals - CoreWeave (NASDAQ:CRWV), IBM (NYSE:IBM)

As CoreWeave Inc. CRWV makes its public market debut, CEO Michael Intrator pushes back on concerns over client concentration and insists that investor skepticism is missing the company's long-term value and growth potential. What Happened: CoreWeave, the AI cloud infrastructure company backed by Nvidia Corp. NVDA, officially began trading on Friday in one of the year's most anticipated IPOs. While the company has reported explosive 700% year-over-year revenue growth, much of that success hinges on two major clients: Microsoft Corp. MSFT and ChatGPT-maker OpenAI, which together account for the majority of its income. Critics have raised red flags over this revenue concentration, but CEO Intrator isn't fazed. See Also: Tesla And Other US Robotics Giants Demand Federal Strategy To Compete With China's $138 Billion Push -- Warn America Will Lose The Race Without It "They say that we had 60% of revenue from Microsoft, and then we signed a contract with OpenAI for just under $12 billion, and now we're less than 50%," he said in an interview with Fortune on Friday. "All the big players that need this type of infrastructure ... those are our customers." Intrator also acknowledged that the size of deals with hyperscalers like Microsoft and OpenAI naturally skews revenue distribution. "When you win one of those mind-bendingly large deals ... there will be concentration," he added. He also pointed out that clients such as JPMorgan Chase & Co. JPM, IBM IBM, and Jane Street use CoreWeave's infrastructure for narrower, but still valuable, workloads. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. The CEO also believes that Wall Street may not fully understand CoreWeave's positioning yet. "There's a divergence between what the capital markets and what the media is thinking, and what I am feeling down in the trenches," he said. "What I am feeling ... is relentless demand. We need more compute. We need larger compute." CoreWeave's IPO is seen as a key test of how public markets are responding to the AI infrastructure boom. Though the company had to scale back its initial offering, Intrator said going public was a strategic move to improve access to the debt markets and reduce capital costs. He also dismissed concerns about entering the market too soon. "The boldness of coming to this market amid the turmoil is because of a fundamental belief that, over time, I will be able to generate enormous value for my investors," Intrator said. Price Action: In after-hours trading, CoreWeave shares were down by 0.07% and reached $39.97 at the time of writing, according to data from Benzinga Pro. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Tim Cook Praises China's DeepSeek For Driving Efficiency, Stresses Apple's 'Prudent And Deliberate' Approach Toward Capital Expenditure Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock CRWVCoreWeave Inc$39.97-0.08%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value-Price TrendShortMediumLongOverviewIBMInternational Business Machines Corp$242.64-1.45%JPMJPMorgan Chase & Co$242.49-2.27%MSFTMicrosoft Corp$377.62-3.32%NVDANVIDIA Corp$109.01-2.17%Market News and Data brought to you by Benzinga APIs

CoreWeave IPO, Elon Musk'x xAI Acquires X, Microsoft's Wake-Up Call, China's Huawei Makes Advances, And More: This Week In AI - CoreWeave (NASDAQ:CRWV), Alphabet (NASDAQ:GOOG)

As the week wraps up, the tech world has been abuzz with exciting news and developments. From CoreWeave Inc.'s CRWV much-anticipated IPO to Elon Musk's massive acquisition, there's a lot to catch up on. Here's a quick look at the top stories that made headlines. CoreWeave's IPO and Revenue Concentration AI cloud infrastructure company, CoreWeave Inc., backed by Nvidia Corp. NVDA, made its public market debut last Friday. CEO Michael Intrator defended the company's client concentration, attributing it to "mind-bendingly large deals" with Microsoft Corp. MSFT and OpenAI. Intrator believes that the skepticism overlooks the company's long-term growth potential. Read the full article here. Elon Musk's $33 Billion Acquisition In a significant move, Elon Musk's AI startup xAI acquired his social media company X, formerly Twitter, in an all-stock deal valued at $33 billion. The combined entity is now reportedly worth $80 billion. Read the full article here. See Also: Ontario Premier Doug Ford Supports Retaliatory Tariffs Amid US Auto Levy: 'Inflict As Much Pain As Possible' Microsoft's Wake-Up Call Microsoft CEO Satya Nadella has urged his teams to match the speed and impact of China's DeepSeek, which launched a top-ranking AI product on the App Store with a team of just 200 engineers. Nadella's call to action came during an internal employee town hall last month. Read the full article here. Huawei's AI Chip Advancements Despite US sanctions, Nvidia CEO Jensen Huang has warned that Huawei Technologies Co. is becoming the "single most formidable technology company" in China. The Chinese tech giant has reportedly doubled its AI chip yields to 40%. Read the full article here. Google's Most Intelligent AI Alphabet Inc.'s GOOG GOOGL Google unveiled Gemini 2.5 Pro, its most intelligent AI model ever. The new model is designed to pause and think before answering complex questions. Google CEO Sundar Pichai shared the development on X. Read the full article here. Read Next: Boeing-Lockheed's Vulcan Rocket Aimed To Rival SpaceX's Falcon 9 Cleared For US Security Missions Photo courtesy: Shutterstock This story was generated using Benzinga Neuro and edited by Rounak Jain CRWVCoreWeave Inc$39.97-0.08%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value-Price TrendShortMediumLongOverviewGOOGAlphabet Inc$155.97-4.95%GOOGLAlphabet Inc$154.24-4.93%MSFTMicrosoft Corp$377.62-3.32%NVDANVIDIA Corp$109.01-2.17%Market News and Data brought to you by Benzinga APIs

CoreWeave's 'Tough' IPO: A Warning Sign For AI Investors? Expert Flags Microsoft's Rejection - Alibaba Gr Hldgs (NYSE:BABA), CoreWeave (NASDAQ:CRWV)

As CoreWeave Inc. CRWV closed at its exact initial public offering price of $40 apiece on Friday, this analyst highlights the challenges for the "tough" IPO, stemming from several reasons, including the reduction in artificial intelligence spending by companies in 2025. What Happened: Dan Niles, the founder and portfolio manager of Niles Investment Management, described the CoreWeave IPO as a "tough" one as it closed at the exact IPO price on its listing day. He said in an X posy that a solid deal is one where the stock is up 15-30% from its IPO price on the opening day of trade. According to Niles, the AI cloud infrastructure company closed at the IPO price because it was backed by Nvidia Corp. NVDA. The chipmaker, led by Jensen Huang, is a 6% investor and contributes at least 15% to CoreWeave's revenue. However, Niles wasn't convinced that Microsoft Corp. MSFT, which contributes to 62% of CRWV's revenue, did not invest $12 billion for extra capacity. "What is more troubling to me is the news story that $MSFT, a 62% customer of Coreweave, turned down a $12B option for more capacity. OpenAI reportedly took this capacity, but Microsoft generates a lot of free cash flow to fund their spending, while OpenAI loses a tremendous amount and will need to raise capital in the future to fund their capex desires," he said. He also recalled Alibaba Group Holding Ltd. ADR BABA chairman, Jack Ma's March 25 statement on AI spending, where he said that pouring a lot of money ahead of significant demand wasn't "entirely necessary". Niles said that these factors, along with reciprocal tariffs on April 2nd, do not bode well for how CoreWeave is likely to trade this upcoming week or related AI names. "AI capex spending by mid-year will be going through a digestion phase due to a slowdown in training demand," Niles said. See Also: Goldman Sachs Warns US Stocks 'Are At Risk Of Further Declines,' But Policy Pivot From Trump Or Fed Could Stoke Recovery Why It Matters: The shares of CRWV dropped 3.73% to $38.51 apiece in premarket on Monday. Despite the short-term outlook, Niles said that "Longer-term, I still believe AI capex spending is likely to double by the end of the decade from current levels driven by inference demand." Addressing the 62% revenue from Microsoft, CRWV's CEO, Michael Intrator, turned down the concerns over client concentration on the listing day. "They say that we had 60% of revenue from Microsoft, and then we signed a contract with OpenAI for just under $12 billion, and now we're less than 50%," he said in an interview with Fortune on Friday. "All the big players that need this type of infrastructure ... those are our customers." Price Action: While CRWV's shares were down in premarket, the SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, dropped in premarket on Monday. The SPY was down 0.91% to $550.59, while the QQQ declined 1.33% to $462.69, according to Benzinga Pro data. Read Next: Scott Bessent Has 'Worst Job In The World Today,' Says Black Swan Author Nassim Taleb, As Treasury Secretary Knows The Implications Of Steep Tariffs Photo courtesy: Shutterstock BABAAlibaba Group Holding Ltd$129.48-2.23%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum95.77Growth73.63Quality54.63Value77.85Price TrendShortMediumLongOverviewCRWVCoreWeave Inc$38.41-3.98%MSFTMicrosoft Corp$372.88-1.56%NVDANVIDIA Corp$105.50-3.80%QQQInvesco QQQ Trust, Series 1$462.86-1.30%SPYSPDR S&P 500$550.58-0.91%Market News and Data brought to you by Benzinga APIs

CoreWeave IPO Performance Likely Due To Company, Not AI Sector: Analyst Says 'Investor Sentiment Remains Mixed' - CoreWeave (NASDAQ:CRWV)

Backed by NVIDIA Corporation NVDA, cloud infrastructure company CoreWeave, Inc. CRWV had one of the most anticipated IPOs in years with its market debut Friday. Analysts share their reactions after the IPO priced below an expected range of $47 to $55 and closed its first day at $40, equaling its IPO price. Rosenblatt on CoreWeave: The technology company's IPO debut was disappointing but could prove to be a positive for miners shifting to high-performance computing, Rosenblatt analyst Chris Brendler said in an investor note. "The market has been taking a 'glass half empty' approach lately, but we still think CoreWeave's IPO and HPC deal with Galaxy are positive developments for our bull case on miners," Brendler said. The analyst said power is still in short supply and Bitcoin miners can supply large loads of power. Brendler said CoreWeave's IPO may be "disappointing and discouraging for the overall IPO market." One item that likely helped was the company's capital commitments from investors like Nvidia, the analyst added. "As a public company, we not only expect improved visibility on the opportunity but also boost CRWV's ability to raise additional capital. As a result, we think we'll see more lease agreements with miners given advantaged access to power." The analyst highlighted a new 15-year lease between Galaxy Digital BRPHF and CoreWeave announced Friday. D. Boral on CoreWeave: The AI company has an IPO that went off with challenges, D. Boral Capital analyst Jesse Sobelson said. "Initially aiming to raise up to $2.7 billion, the company ultimately settled for $1.5 billion, pricing shares at $40," Sobelson said. The analyst said Nvidia helped backstop the offering, buying shares directly with investor demand falling short of initial expectations. "CRWV's business model revolves around renting high-performance GPU infrastructure to companies requiring substantial computational power for AI, machine learning, and other GPU-accelerated workloads." Sobelson said the company being unprofitable and having $7 billion in debt may have overshadowed the $1.9 billion in revenue it had last year. The analyst said partnerships with Nvidia, OpenAI and Microsoft show confidence in the long-term potential of CoreWeave, but may not be enough for investors at the lofty valuation. "Investor sentiment remains mixed, especially so given Microsoft's recent comments on moderating its AI infrastructure commitments." The analyst said the lackluster IPO shouldn't be a warning for AI stocks, but rather a reflection of the broader market conditions and risks specific to CoreWeave. "As CRWV's public market performance unfolds, investors will be closely watching for signs of stabilization and evidence that the company can maintain momentum despite potential headwinds." CRWV Price Action: CoreWeave stock is down 7.31% to $37.04 on Monday. The stock has traded between $36 and $41.94 since going public Friday. Read Next: * Top Wall Street Forecasters Revamp Progress Software Price Expectations Ahead Of Q1 Earnings Photo: Shutterstock CRWVCoreWeave Inc$36.95-7.62%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value16.13Price TrendShortMediumLongOverviewBRPHFGalaxy Digital Holdings Ltd$11.13-3.14%NVDANVIDIA Corp$105.33-3.96%Market News and Data brought to you by Benzinga APIs

Investor Flags This As 'Big Test' for Nvidia Stock As Jensen Huang-Led Company Loses Over 21% In 2025 - CoreWeave (NASDAQ:CRWV), NVIDIA (NASDAQ:NVDA)

Nvidia Corporation NVDA, a major player in the AI industry, is facing a significant market challenge following the public debut of cloud computing firm CoreWeave CRWV. What Happened: An investor known as Bluesea Research has voiced concerns over the impact of CoreWeave's IPO on Nvidia. The investor believes that the result of the IPO will be a "big test for Nvidia and the entire AI industry." Bluesea Research also cautioned that a substantial correction from CoreWeave's $40 IPO price target could negatively affect sentiment toward Nvidia's stock, reported Business Insider. CoreWeave, a significant client and investor for Nvidia, recently went public. By late 2024, Nvidia had provided CoreWeave with more than 250,000 GPUs and owned a 6% stake in the company. Despite Nvidia's robust fundamentals and its role in propelling the AI trend, its stock has seen a decrease of about 19% this year. This drop is linked to worries over a potential slowdown in spending and larger geopolitical issues. See Also: Mark Cuban Says, If They Replaced Elon Musk With Him, He's Still Try to Make Government Smaller By 'Cutting A Lot Of People' CoreWeave has already lowered its IPO price target by over 25% and decreased the size of its offering by 23.5%. Bluesea Research sees these moves as signs of a potential decrease in AI capex investments in the near future. Why It Matters: CoreWeave's IPO has been one of the most anticipated in recent years, backed by Nvidia. However, the IPO priced below the expected range of $47 to $55 and closed its first day at $40, equal to its IPO price. The company, despite generating $1.9 billion in revenue last year, remains unprofitable and carries $7 billion in debt. This led to a challenging IPO, with the company settling for $1.5 billion instead of the initially aimed $2.7 billion. Despite the IPO slump, Cathie Wood-led Ark Invest made notable trades in CoreWeave. The ARK Next Generation Internet ETF purchased 98,159 shares of CoreWeave. Meanwhile, analyst Kevin Green from Charles Schwab explains that CoreWeave's weak IPO highlights a broader "degrossing" trend, where investors reduce exposure to high-valuation stocks like Nvidia after strong gains. Green also suggests that despite a plateau over recent months and a short-term pullback, Nvidia's longer-term three-year uptrend remains intact. The performance of CoreWeave's IPO and the subsequent market reactions provide a crucial context to Nvidia's current market test and the broader AI industry's investment climate. Jensen Huang's NVDA stock has fallen over 21% in 2025 so far, according to data from Benzinga Pro. Benzinga's Edge Rankings highlight strong momentum and growth rankings for Nvidia in the 77th and 95th percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks. Read Next: Elon Musk's 'Baby Mama' Sells $100K Tesla After 60% Child Support Cut, MAGA Influencer Says She's 'Not the Only One Who Is Cleaning Up After His Messes' - Tesla TSLA - Benzinga Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. CRWVCoreWeave Inc$37.801.94%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value16.13Price TrendShortMediumLongOverviewNVDANVIDIA Corp$107.51-0.80%TSLATesla Inc$263.771.78%Market News and Data brought to you by Benzinga APIs

CoreWeave Surges 42% In Post-IPO Rally As Nvidia-Backed AI Firm Recovers From Weak Debut - CoreWeave (NASDAQ:CRWV), Galaxy Digital Holdings (OTC:BRPHF)

Artificial intelligence infrastructure provider CoreWeave Inc. CRWV shares closed up 42% at $52.57 on Tuesday, marking a significant recovery in its third day of trading after the company's initial public offering faced initial headwinds. What Happened: The Nvidia Corp. NVDA backed cloud computing firm, which priced its IPO at $40 per share below its expected range of $47 to $55, has now demonstrated substantial investor interest despite early concerns. CoreWeave shares had debuted at $39 on Friday. Analysts suggest the company's IPO challenges were specific to CoreWeave rather than indicative of the broader AI sector's health. Rosenblatt analyst Chris Brendler noted that while the IPO debut was disappointing, it could prove beneficial for miners transitioning to high-performance computing. "The market has been taking a 'glass half empty' approach lately, but we still think CoreWeave's IPO and HPC deal with Galaxy are positive developments," Brendler said, highlighting a new 15-year lease between Galaxy Digital BRPHF and CoreWeave announced Friday. D. Boral Capital analyst Jesse Sobelson pointed to specific company challenges, noting CoreWeave ultimately raised $1.5 billion instead of its initial $2.7 billion target. Nvidia reportedly helped backstop the offering when investor demand fell short of expectations. See Also: Gold Holds Above $3,100 Mark Amid Growing Economic Uncertainty: Here Are Some ETFs To Capitalize On The Golden Rush Why It Matters: CoreWeave's strategic partnerships with industry leaders, including OpenAI, Meta Platforms Inc. META, Microsoft Corp. MSFT, and Nvidia, demonstrate significant confidence in the company's long-term potential. The company's business model centers on renting high-performance GPU infrastructure to enterprises requiring substantial computational power for AI and machine learning workloads, a sector experiencing extraordinary demand growth, with CoreWeave reporting 737% year-over-year revenue growth in 2024. Read Next: Tesla's European Sales Decline For 3rd Consecutive Month Amid China Competition, CEO Elon Musk's Political Controversies Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BRPHFGalaxy Digital Holdings Ltd$11.13-2.27%OverviewCRWVCoreWeave Inc$53.251.29%METAMeta Platforms Inc$583.03-0.51%MSFTMicrosoft Corp$380.45-0.46%NVDANVIDIA Corp$109.13-0.93%Market News and Data brought to you by Benzinga APIs

Why CoreWeave Stock Rocketed Higher Today | The Motley Fool

CoreWeave (CRWV 19.26%) stock has had a bumpy start after it hit the public markets last week. Its initial public offering (IPO) wasn't well received on Friday, and the stock plunged in its first full day of trading yesterday. Shares of the cloud infrastructure company are soaring today, however. The stock was up by 21.5% as of 1:45 p.m. ET, making it comfortably above its $40 IPO offering price. One reason for the pivot likely came thanks to strong quarterly results from artificial intelligence (AI) software infrastructure provider Progress last night. Another has more to do with CoreWeave itself. While Progress is a smaller company with a market cap of about $2.4 billion, the market is rewarding the provider of AI-powered digital experience and infrastructure software for a strong fiscal first quarter. Revenue soared 30% versus the prior-year period, showing that businesses continue to integrate the use of AI into enterprise IT (information technology) infrastructure. How does that relate to CoreWeave? While its IPO last week wasn't well received, mainly due to concerns its heavy debt load would weigh it down just as companies might start pulling back on AI infrastructure spending, Progress' report is a small sign that capital should continue to be spent as businesses see returns using AI infrastructure. Investors may now be focusing more on a critical deal that CoreWeave announced prior to its IPO. The newly public company has an $11.9 billion contract with OpenAI to deliver AI infrastructure to expand OpenAI's compute capacity. That one deal will go a long way to helping CoreWeave pay the debt it has incurred to grow the compute capacity it offers other AI companies. CoreWeave needs a strong and growing AI sector to succeed. It has what it needs in place for that to happen. Another positive sign in the macro picture helped convince investors that its initial lackluster trading as a public company was an opportunity to get on board.

Why Nvidia-Backed CoreWeave Stock Is Plunging a Day After Its IPO | The Motley Fool

The much-anticipated initial public offering (IPO) of CoreWeave (CRWV -7.55%) came Friday. The stock ended the day where it started trading at its offering price of $40 per share. But stock in the artificial intelligence (AI) hyperscaler is plunging on its first full day of trading. AI leader Nvidia purchased $250 million at the IPO price according to reports, but that investment is now underwater. CoreWeave shares were down by 7.9% as of 11:08 a.m. ET. CoreWeave raised $1.5 billion with its move to go public, but investors are shying away from the cloud platform provider. The company even had to downsize its offering as shares were priced below the expected range. The timing is one reason for the lackluster reception. The recent market correction has hit tech stocks especially hard. And CoreWeave is relying on robust demand for data center compute power to continue. The cloud company went heavily into debt to build its massive scale of Nvidia GPU chips. CoreWeave leases data center space to companies needing the compute power it has from 250,000 Nvidia chips it has purchased. One issue is that many of those chips are from the Hopper generation. Nvidia is now producing and selling more powerful Blackwell chips. Next year, an even more efficient Rubin platform will be available. That's not to say that the Hopper chips aren't in demand. But one question and concern for investors is how much value they will retain as they become more obsolete. CoreWeave utilized debt to build its inventory. CEO Michael Intrator told CNBC, "The debt is the engine, it's the fuel for this company." The IPO proceeds will help to repay some of its reported $13 billion in debt CoreWeave has raised. But the company will need to continue its fast-paced revenue growth to help cover that debt load. Market uncertainty in general and questions on the runway of relevance for its chip inventory have investors staying away from the stock so far. Only risk-averse investors should consider the stock at this stage.

Does Nvidia-Backed CoreWeave's Lackluster IPO Signal the AI Stock Boom Is Officially Over? | The Motley Fool

An up-and-coming company specializing in the hottest technology area decides to go public. It's teamed up with the most prominent player in that area. The company's initial public offering (IPO) is set to be the biggest for a tech stock in years. And then... pfffft. That's the story for artificial intelligence (AI) hyperscaler CoreWeave (CRWV 42.14%). Despite backing by AI giant Nvidia (NVDA 1.63%), its recent IPO was lackluster at best. Does this signal that the AI stock boom is officially over? Expectations were high when CoreWeave filed for its IPO on March 3. The company's revenue soared 737% year over year in 2024. It boasted major customers, including IBM, Meta Platforms, and Microsoft. CoreWeave enjoys an especially close relationship with Nvidia. It uses Nvidia's GPUs. CoreWeave's software and infrastructure also help maximize the GPUs' performance. Nvidia wasn't just a partner, though: Before the IPO, the chipmaker owned roughly 1% of CoreWeave's voting power. Nvidia also came to the rescue when CoreWeave's IPO nearly fell apart. The small company planned to sell its shares from $47 to $55. However, not enough investors were interested in buying at that price range. Fortunately for CoreWeave, Nvidia offered to buy shares at $40 so the IPO could move forward. So what happened with the IPO? CoreWeave stock opened at the $40-per-share price Nvidia paid. And that's the same price the new AI stock closed on its first day of trading. It's now even lower. Contrast CoreWeave's experience with Tempus AI's IPO in June 2024, less than a year ago. The AI-powered healthcare diagnostics company was also backed by an AI giant -- in this case, Google parent Alphabet. However, Tempus AI priced its shares at the upper end of its initial IPO range. Its stock jumped almost 9% on the first day of trading and are roughly 20% higher now despite some huge up-and-down swings. Is the theme song for AI stocks now the B.B. King classic "The Thrill Is Gone"? That might seem to be the case. CoreWeave's lackluster IPO that nearly flopped without Nvidia's intervention could indicate that the infatuation with AI stocks is now over. Nvidia itself could provide another big hint that the AI boom has officially ended. The company has been the superstar of this boom from the beginning, skyrocketing more than tenfold between Oct. 1, 2022, and Dec. 31, 2024. But Nvidia's share price has now tumbled around 27% below its all-time high. In 1897, several newspapers reported that Mark Twain was seriously ill and possibly about to die in poverty. When contacted about the story, the well-known author was said to have replied, "Reports of my death are greatly exaggerated." I think we should remember Mark Twain when considering whether the AI stock boom is really over. Sure, CoreWeave's IPO wasn't a huge success. Yes, many AI stocks have fallen quite a bit. That doesn't mean, though, that the AI stock boom is kaput. I suspect we're merely seeing a pause that will eventually resume. This pause, by the way, doesn't seem to be the result of serious worries about the demand for AI. Instead, the entire stock market is highly volatile primarily because of uncertainty about the impact of the Trump administration's tariffs. I'm not suggesting that investors jump on the CoreWeave bandwagon, if there is one. This is a stock that trades at a high price-to-sales ratio of nearly 10. The company also remains unprofitable. However, I don't think we've yet seen the full impact of how AI will revolutionize the world around us. Companies with the best AI products will have tremendous growth opportunities over the next decade and beyond. To paraphrase Mark Twain, reports of the end of the AI stock boom are greatly exaggerated.

CoreWeave IPO: Is this Fast-Growing AI Stock a Buy Right Now? | The Motley Fool

Since artificial intelligence (AI) caught the attention of the market beginning in November 2022, Nvidia (NVDA -0.45%) has set the bar for blockbuster growth among AI-associated stocks. The GPU specialist posted five straight quarters of triple-digit revenue growth through fiscal 2024 and 2025, peaking at 265% in the third quarter of fiscal 2024. The recently IPO'd CoreWeave (CRWV 6.81%) offered the latest reminder of the explosive growth in AI, and its recent revenue jump blew Nvidia's away. Admittedly, CoreWeave is much smaller than Nvidia, but its revenue soared 737% in 2024 to reach $1.9 billion. As a cloud infrastructure platform purpose-built for AI, CoreWeave is the first significant initial public offering in this new AI era (the stock went public on Friday, March 28). Let's take a look at what you should know about CoreWeave before discussing whether it's a buy. CoreWeave's path to becoming an AI cloud computing platform isn't what you'd expect. The company was originally founded in 2017 by three entrepreneurs with a history of trading carbon credits as The Atlantic Crypto Corp., focused on mining Ethereum during the crypto boom back then. By 2019, the company had changed its name to CoreWeave as it pivoted to become a data center business, leveraging the power of the GPUs it had initially purchased for Ethereum mining, and then through acquiring distressed hardware companies during the "crypto winter" of 2018 and 2019. The company began using its computing infrastructure to render videos or training AI models for customers. In 2020, it started to evolve into the cloud platform it is today when it began renting Nvidia GPUs in the cloud to its customers. From there, CoreWeave attracted customers, as its service was faster than traditional platforms, making it ideal for AI applications. Its revenue has jumped roughly 119x in the last two years, from $16 million in 2022 to $1.9 billion in 2024. Along the way, Nvidia and OpenAI have become investors. The company sees its competitive advantage as being purpose-built for AI, while traditional cloud platforms are "built to host websites, databases, and SaaS apps, which have fundamentally different needs than the high-performance requirements of AI," as CoreWeave says in its prospectus. CoreWeave's soaring growth is no doubt impressive, but it's not as safe as it might seem. Customer concentration is a big risk for the company. In 2024, 62% of its revenue came from Microsoft (MSFT -0.31%), and 15% came from its second-biggest customer. However, there are signs Microsoft's demand for its computing infrastructure is slowing. In March, Microsoft chose to not exercise an option to buy nearly $12 billion more worth of data center capacity from CoreWeave, which some interpreted as a sign that demand for AI computing, including from CoreWeave, was slowing. CoreWeave said in its prospectus that it is diversifying away from Microsoft, noting that the Windows maker will represent less than 50% of expected future committed contract revenues due to the $11.55 billion in future revenue it expects from OpenAI as part of its master services agreement. It also said its remaining performance obligations (RPO) rose 53% last year, a sign that its backlog of business is growing robustly, a good sign for continuing revenue growth. Microsoft, whose share of CoreWeave's revenue went from 35% in 2023 to 62% in 2024, is driving most of the revenue growth at the moment. But CoreWeave is also seeing surging demand from other customers, as the OpenAI deal shows. Still, the news about Microsoft seems to have spooked investors, as last week's IPO was undersubscribed and priced under the company's target range. Additionally, the stock closed flat in its opening day, and declined 7% on its second trading day, a clear sign that it was not an auspicious beginning for the AI stock (it has since recovered those losses). CoreWeave is a high-risk stock at this stage. IPO stocks are typically high-risk, as it takes a while for them to find equilibrium in the stock market. However, given its pure-play exposure to AI, high growth, and customer concentration, CoreWeave is especially risky, and even more so at this stage of the market cycle, as the Nasdaq Composite (^IXIC 0.24%) is trading in correction territory. Despite the concerns about the relationship with Microsoft, the fundamentals and valuation of the business look solid, as it trades at a price-to-sales ratio of less than 7. It reported a generally accepted accounting principles (GAAP) operating profit of $324.4 million on $1.9 billion in revenue, though it is still unprofitable on an adjusted basis from the $7 billion in debt it holds and the resulting interest expense. CoreWeave's IPO struggles seem to be more a reflection of investor sentiment around tariffs and other issues than the business itself. Given the direct exposure to AI in its business model, CoreWeave should do well over the long term if investment in AI infrastructure continues to grow. While the stock is likely to be volatile over the next few months at least, the long-term opportunity for CoreWeave looks considerable. Therefore, for patient, long-term investors, getting at least a little bit of exposure here makes sense.

Report: CoreWeave's Downsized IPO Signals Cooling of Enthusiasm for AI | PYMNTS.com

The company, which offers cloud solutions for accelerated computing and dubs itself "the AI Hyperscaler," said in a Thursday (March 27) press release that it is pricing its IPO at $40 per share. CoreWeave had said in a March 20 filing with the Securities and Exchange Commission that it expected to price its IPO between $47 and $55 per share. The company also reduced the size of its IPO from the 49 million shares mentioned in the March 20 filing to the 37.5 million shares announced in the March 27 press release. These changes signal flagging investor interest in AI and a shift from the AI boom of a year ago when AI chip maker Nvidia became the world's most valuable publicly traded company for a time, The Wall Street Journal (WSJ) reported Friday. While companies are spending hundreds of billions of dollars on the technology, investors are uncertain about the sustainability of the AI boom, according to the report. The shortage of the GPUs used to build and train AI seen in mid-2023 has subsided, and the cost of renting a GPU for an hour has dropped to about a quarter of what it was at that time, per the report. When it comes to CoreWeave's business in particular, investors have noted that its customer base is concentrated, with Microsoft accounting for nearly two-thirds of its 2024 revenue, the report said.

CoreWeave valued at $23 bil. in muted Nasdaq debut

A screen displays the company logo for CoreWeave, Inc., Nvidia-backed cloud services provider, during the company's IPO at the Nasdaq Market, in New York City, U.S., March 28. Reuters-Yonhap CoreWeave's shares closed flat after opening nearly 3 percent below their offer price in its Nasdaq debut on Friday, giving the Nvidia-backed AI infrastructure firm a valuation of $23 billion on a fully diluted basis. The lackluster performance could crush hopes of a meaningful recovery in IPOs, especially when equity markets are grappling with tariff-related turmoil. Wall Street stocks closed sharply lower on Friday, with the tech-heavy Nasdaq falling 2.7 percent. It could also dampen sentiment towards AI infrastructure amid rising uncertainty over Big Tech's massive spending spree and fears of competition from lower-cost options such as China's AI startup DeepSeek, which require fewer chips. The stock opened for trading at $39, compared with the IPO price of $40. CoreWeave had already taken a hit on Thursday, when it had to downsize its initial public offering. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the company's growth has been meteoric, its long-term sustainability is yet to be tested. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported on Thursday. Despite the downsize, the IPO was the largest AI-related listing by amount raised according to Dealogic, which has compiled data as far back as 1995. Michael Intrator, Founder & CEO of CoreWeave, Inc., Nvidia-backed cloud services provider, attends his company's IPO at the Nasdaq Market, in New York City, U.S., March 28. Reuters-Yonhap Financial risks Investors have previously driven AI-related companies such as Oracle and Microsoft to lofty valuations. Yet, both companies, which markets may view as comparables to CoreWeave, have fallen 13 percent and 7 percent this year, respectively. CoreWeave sparked worries among risk-averse investors during its roadshow as they weighed its long-term growth prospects, financial risks and capital intensity in a volatile market. "The infrastructure that you need to build and deliver artificial intelligence is one of the true super cycles that exist," CoreWeave CEO Mike Intrator said in an interview with Reuters. "Working with the clients who are building the infrastructure that will drive artificial intelligence, there has been no reduction in demand." Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77 percent of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. "The OpenAI contract... materially decreases the single client concentration, and we'll continue to do that over the next several years," Intrator told Reuters when asked about these concerns. CoreWeave signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, Reuters first reported earlier this month, forging ties with the most prominent startup in the industry. The company's executives also said their contracts with Microsoft haven't changed and they haven't seen any commitments canceled or withdrawn by the cloud giant. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge", Ethereum's 2022 upgrade, slashed rewards for miners. CoreWeave's revenue has grown at breakneck speed, climbing more than eight-fold last year. The company had around $8 billion in debt as of last year. It said earlier this month that it plans to use about $1 billion of the IPO proceeds to repay debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, JPMorgan and Goldman Sachs. (Reuters)

CoreWeave valued at $23 bil. in muted Nasdaq debut

A screen displays the company logo for CoreWeave, Inc., Nvidia-backed cloud services provider, during the company's IPO at the Nasdaq Market, in New York City, U.S., March 28. Reuters-Yonhap CoreWeave's shares closed flat after opening nearly 3 percent below their offer price in its Nasdaq debut Friday, giving the Nvidia-backed AI infrastructure firm a valuation of $23 billion on a fully diluted basis. The lackluster performance could crush hopes of a meaningful recovery in IPOs, especially when equity markets are grappling with tariff-related turmoil. Wall Street stocks closed sharply lower Friday, with the tech-heavy Nasdaq falling 2.7 percent. It could also dampen sentiment towards AI infrastructure amid rising uncertainty over Big Tech's massive spending spree and fears of competition from lower-cost options such as China's AI startup DeepSeek, which require fewer chips. The stock opened for trading at $39, compared with the IPO price of $40. CoreWeave had already taken a hit Thursday, when it had to downsize its initial public offering. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the company's growth has been meteoric, its long-term sustainability is yet to be tested. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported Thursday. Despite the downsize, the IPO was the largest AI-related listing by amount raised according to Dealogic, which has compiled data as far back as 1995. Michael Intrator, Founder & CEO of CoreWeave, Inc., Nvidia-backed cloud services provider, attends his company's IPO at the Nasdaq Market, in New York City, U.S., March 28. Reuters-Yonhap Financial risks Investors have previously driven AI-related companies such as Oracle and Microsoft to lofty valuations. Yet, both companies, which markets may view as comparables to CoreWeave, have fallen 13 percent and 7 percent this year, respectively. CoreWeave sparked worries among risk-averse investors during its roadshow as they weighed its long-term growth prospects, financial risks and capital intensity in a volatile market. "The infrastructure that you need to build and deliver artificial intelligence is one of the true super cycles that exist," CoreWeave CEO Mike Intrator said in an interview with Reuters. "Working with the clients who are building the infrastructure that will drive artificial intelligence, there has been no reduction in demand." Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77 percent of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. "The OpenAI contract... materially decreases the single client concentration, and we'll continue to do that over the next several years," Intrator told Reuters when asked about these concerns. CoreWeave signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, Reuters first reported earlier this month, forging ties with the most prominent startup in the industry. The company's executives also said their contracts with Microsoft haven't changed and they haven't seen any commitments canceled or withdrawn by the cloud giant. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge", Ethereum's 2022 upgrade, slashed rewards for miners. CoreWeave's revenue has grown at breakneck speed, climbing more than eight-fold last year. The company had around $8 billion in debt as of last year. It said earlier this month that it plans to use about $1 billion of the IPO proceeds to repay debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, JPMorgan and Goldman Sachs. (Reuters)

CoreWeave Announces Pricing of Initial Public Offering By Investing.com

CoreWeave, Inc. ("CoreWeave"), the AI Hyperscaler™, announced today the pricing of its initial public offering of 37,500,000 shares of its Class A common stock at a public offering price of $40.00 per share. The offering consists of 36,590,000 shares of Class A common stock to be sold by CoreWeave and 910,000 shares of Class A common stock to be sold by existing stockholders (the "Selling Stockholders"). CoreWeave will not receive any proceeds from the sale of shares of Class A common stock by the Selling Stockholders. The shares are expected to begin trading on the Nasdaq Global Select Market on March 28, 2025 under the ticker symbol "CRWV." The offering is expected to close on March 31, 2025, subject to the satisfaction of customary closing conditions. In addition, CoreWeave has granted the underwriters a 30-day option to purchase up to an additional 5,625,000 shares of Class A common stock to cover over-allotments at the initial public offering price, less underwriting discounts and commissions. Morgan Stanley , J.P. Morgan, and Goldman Sachs & Co (NYSE:GS). LLC are acting as joint lead bookrunners for the offering. Barclays (LON:BARC), Citigroup (NYSE:C), MUFG, Deutsche Bank (ETR:DBKGn) Securities, Jefferies, Mizuho, Wells Fargo (NYSE:WFC) Securities, and BofA Securities are acting as joint bookrunners for the offering. Guggenheim Securities, M. Klein & Company, Macquarie Capital, Needham & Company, Santander (BME:SAN), Stifel, and Galaxy Digital (TSX:GLXY) Partners LLC are acting as co-managers for the offering. A registration statement relating to these securities was declared effective by the Securities and Exchange Commission on March 27, 2025. The offering is being made only by means of a prospectus. A copy of the final prospectus may be obtained, when available, from: Morgan Stanley & Co (NYSE:MS). LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions (NYSE:BR), 1155 Long Island Avenue, Edgewood, NY 11717 or email: [email protected]; or Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, NY 10282 or by emailing [email protected]. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

CoreWeave stock whimpers in IPO debut By Investing.com

Investing.com -- Today's IPO for CoreWeave opened for trading at $39 on Wall Street after pricing its lackluster deal at $40 per share. Shares have since stabilized, last trading up 2.4% to $40.95. The AI cloud service provider priced 37.5 million shares, raising $1.5 billion in total for the company and selling shareholders. This was substantially below the original plan to sell 49 million shares between $47-$55, which could have raised as much as $2.695 billion. Half of the $1.5 billion raised in the deal came from three buyers, Bloomberg News reported on Friday. Further, the top 15 investors took 90 percent of the shares. NVIDIA (NASDAQ:NVDA), which is a trusted partner and GPU provider of CoreWeave, was said to have bought $250 million in stock to anchor the IPO. The IPO was led by Morgan Stanley (NYSE:MS), JP Morgan and Goldman Sachs (NYSE:GS). Financially, the company posted some impressive numbers in 2024. Revenue surged 737% to $1.9 billion as demand for the company's AI services skyrocketed. However, despite the revenue surge, the company still posted a net loss of $0.9 billion for the year. The weak demand for the offering could be related to fears that the demand for its AI data centers has peaked. These fears were heightened recently on speculation that Microsoft (NASDAQ:MSFT), CoreWeave's largest customer, pulled out of data center leases in the U.S. and Europe. TD Cowen analyst Michael Elias said earlier this week that Microsoft walked away from +2GW of capacity in both the U.S. and Europe in the last six months that was in the process of being leased and has both deferred and canceled existing data center leases in both the U.S. and Europe in the last month. While the decision was largely driven by the decision not to support incremental Open AI training workloads, the analyst believe that the lease cancellations and capacity deferrals indicate an oversupply of data centers.

CoreWeave IPO falls 8% on second day, despite NVIDIA lifeline By Investing.com

Investing.com -- Monday saw CoreWeave, a provider of AI cloud services, experience a decline in its stock price on its second day as a public company. The stock was last down 8% to $36.90 after a lackluster initial public offering (IPO) last Friday. The company's shares, which were priced at $40 during the IPO, opened at $39 on Friday and ended the day at the same level, $40. CoreWeave's IPO saw the company and selling shareholders raise $1.5 billion through the sale of 37.5 million shares. This figure fell short of the initial target of selling 49 million shares at a price range of $47 to $55, which could have raised as much as $2.695 billion. Half of the funds raised came from just three buyers, according to reports, while the top 15 investors acquired 90 percent of the offering. Notably, NVIDIA (NASDAQ:NVDA), a key partner and GPU supplier to CoreWeave, invested $250 million to support the IPO. Despite a remarkable 737% increase in revenue to $1.9 billion, driven by soaring demand for its AI services, CoreWeave reported a substantial net loss of $0.9 billion for the year. The company's financial performance reflects the challenges it faces as it scales its operations amidst rapid growth. The tepid demand for CoreWeave's shares may be attributed to concerns that the market for its AI data centers has reached its zenith. These apprehensions have been exacerbated by recent rumors that Microsoft (NASDAQ:MSFT), CoreWeave's largest customer, has withdrawn from data center leases both in the United States and Europe, casting further doubt on the company's future growth prospects. Following the tepid IPO, DA Davidison analyst Gil Luria - one of the few analysts that formally cover the stock so far - lowered his price target to $36 from $47, while maintaining a Neutral rating. "NVIDIA having to save the IPO last minute supports our view that CoreWeave looks like a special purpose vehicle for NVDA - an off balance sheet arrangement to amplify $350 million investment into a $10 billion customer," Luria commented. "Some investors pointed out that CoreWeave is in turn creating its own special purpose vehicle with OpenAI to raise capital for OpenAI's own financial commitment. We believe NVDA created CRWV in order to apply competitive pressure on its largest customers and create artificial scarcity, which makes it that much more concerning a vast majority of CRWV revenue comes from MSFT, META (NASDAQ:META) and NVDA itself."

CoreWeave's IPO: The Prime AI Bubble Indicator | Investing.com UK

Representing top tech stocks, the Nasdaq 100 (NDX) index is down 8% since the beginning of the year, trending even lower to September 2024 level. The main culprit is the uncertainty surrounding President Trump's tariffs on imports, covering a wide range of tech products from semiconductors to automotive components. It is also uncertain how Elon Musk's DOGE revelations will affect massive government and NGO-adjacent employment, which appears superfluous. These employees may not only lose jobs but also lock-in profits, exacerbating market volatility. These compounding factors could induce recession, with Polymarket odds for one in 2025 hovering around 38%. But what does that mean for the latest addition to Nasdaq, the AI cloud computing stock CoreWeave Inc (NASDAQ:CRWV)? Having been listed on Nasdaq since Friday, CRWV stock opened at $39.67 and closed slightly higher at $40 per share. When it comes to the tech sector, this is not surprising. Even one year after the dot-com bubble burst, in 2001, the average first-day return for IPOs yielded 14.15% gains. At press time on Monday, CRWV is priced at $37.48, holding around its lowest point on Friday, of $37.46 per share. Despite aiming for a $2.5 billion funding, which would've set CRWV price within the $47 - $55 range, CoreWeave CEO Michael Intrator settled for around $40. On Friday's Squawk Box, Intrator attributed the valuation downsize to "a lot of headwinds in the macro". Nonetheless, CoreWeave's publicly traded launch has been successful. After all, the annual IPO market suffered a steep decline since 2021, having dropped from 1035 to 225 IPOs in 2024. This makes CRWV launch one of the most valued tech offerings since 2021. But by the end of the year, should investors expect CRWV stock to go substantially above $40 or lower? Harnessing compute clusters across 250,000 Nvidia's GPUs, CoreWeave counts on ever-escalating AI demand for compute power. This is not difficult to imagine, given that even White House joined the Studio Ghibli mania that engulfed the internet this month. For comparison, Microsoft (NASDAQ:MSFT) accrued 485,000 GPUs in 2024 for its Azure cloud and to power its 365 Copilot AI. Such a phenomenon clearly points to AI content generation becoming commonplace across all human activity. Although the efficiency of Chinese DeepSeek AI somewhat dampened the expectations for compute power demand, both image and video generation are far more taxing. Indeed, just a month after DeepSeek's entry, the spending on AI from Big Tech hyperscalers showed no signs of stopping. It is with this wider picture in mind that CoreWeave accumulated $12.9 billion in debt. The company used that debt to run/lease 32 AI data centers worth around 1.3GW of compute power. To compete against Big Tech players such as Amazon (NASDAQ:AMZN) (AWS), Microsoft (Azure), and Google (NASDAQ:GOOGL) (GCP), CoreWeave focuses on optimization for AI workloads. This ranges from liquid cooling for high-density server racks to network bandwidth interconnectivity. Just like with Bitcoin mining companies, CoreWeave leverages colocation, as its shared infrastructure drastically increases cost-effectiveness and scalability. At present market cap of $17.3 billion, CoreWeave is yet to enter profitability owing to investments in rapid data center expansion. In 2024, the company generated $1.9 billion revenue with a net loss of $863.4 million. Although this infrastructure-as-a-service business model is yet to yield money, it bears remembering that CoreWeave revenue jumped 737% from 2023 to 2024. Even better, the company grew over 1300% from 2022's $15.8 million revenue. In other words, CoreWeave justifies debt accumulation to expand, based on future AI compute demand needs. In the S1 earnings filed to the SEC, as of December 31st, 2024, the company reported $1.36 billion in cash reserves and $15.1 billion in remaining performance obligations (RPO). This is the amount of contracted revenue that CoreWeave has not yet recognized as earned. To put it differently, it represents future revenue from AI demand contracts. Given CoreWeave's massive debt load, to surface into sustainable profitability, the company counts on the "massive and unprecedented growth of AI" to continue. Ultimately, if AI hype proves to be a bubble, CoreWeave will be one of the first ones to burst. However, there are good reasons to believe AI doesn't constitute a bubble but a new layer of computation that spans both work loads and daily life. It could be said that AI image generation alone already makes the case for successful commercialization of AI. Nonetheless, CoreWeave warned of the uncertainty in this emerging sector. "The broader adoption, use, and commercialization of AI technology, and the continued rapid pace of developments in the AI field, are inherently uncertain." Yet, judging by AI improvements in just two short years, CoreWeave's vulnerable debt commitments appear to be justified. During the current macro uncertainty, CRWV shareholders should expect the average price target at $36 per share. But if investors are convinced of AI's successful future, this should be viewed as the optimal entry price point. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

CoreWeave sees first day of gains since IPO By Investing.com

During its debut on Friday, shares priced weakly, opened lower, and closed flat. The stock then continued 7% lower on Monday. However, they seemed to have found some traction - currently trading up 20% to $44.50. Half of the $1.5 billion raised in the IPO came from three buyers, according to reports, with partner NVIDIA Corporation (NASDAQ:NVDA) buying $250 million in stock to anchor the IPO. Some analysts have called CoreWeave a "special purpose vehicle" for NVIDIA. "We believe NVDA created CRWV in order to apply competitive pressure on its largest customers and create artificial scarcity, which makes it that much more concerning a vast majority of CRWV revenue comes from MSFT, META (NASDAQ:META) and NVDA itself," DA Davidson analyst Gil Luria commented recently in a note to clients. Luria is no fan of the stock, assigning a Neutral rating and $36 price target. In 2024, CoreWeave's revenue surged 737% to $1.9 billion as demand for the company's AI services skyrocketed. However, despite the revenue surge, the company still posted a net loss of $0.9 billion for the year.

CoreWeave Announces Pricing of Initial Public Offering

LIVINGSTON, N.J., March 27, 2025 /PRNewswire/ -- CoreWeave, Inc. ("CoreWeave"), the AI Hyperscaler™, announced today the pricing of its initial public offering of 37,500,000 shares of its Class A common stock at a public offering price of $40.00 per share. The offering consists of 36,590,000 shares of Class A common stock to be sold by CoreWeave and 910,000 shares of Class A common stock to be sold by existing stockholders (the "Selling Stockholders"). CoreWeave will not receive any proceeds from the sale of shares of Class A common stock by the Selling Stockholders. The shares are expected to begin trading on the Nasdaq Global Select Market on March 28, 2025 under the ticker symbol "CRWV." The offering is expected to close on March 31, 2025, subject to the satisfaction of customary closing conditions. In addition, CoreWeave has granted the underwriters a 30-day option to purchase up to an additional 5,625,000 shares of Class A common stock to cover over-allotments at the initial public offering price, less underwriting discounts and commissions. Morgan Stanley, J.P. Morgan, and Goldman Sachs & Co. LLC are acting as joint lead bookrunners for the offering. Barclays, Citigroup, MUFG, Deutsche Bank Securities, Jefferies, Mizuho, Wells Fargo Securities, and BofA Securities are acting as joint bookrunners for the offering. Guggenheim Securities, M. Klein & Company, Macquarie Capital, Needham & Company, Santander, Stifel, and Galaxy Digital Partners LLC are acting as co-managers for the offering. A registration statement relating to these securities was declared effective by the Securities and Exchange Commission on March 27, 2025. The offering is being made only by means of a prospectus. A copy of the final prospectus may be obtained, when available, from: Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or email: [email protected]; or Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, NY 10282 or by emailing [email protected]. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. About CoreWeave, Inc. CoreWeave, the AI Hyperscaler™, delivers a cloud platform of cutting-edge software powering the next wave of AI. The company's technology provides enterprises and leading AI labs with cloud solutions for accelerated computing. Since 2017, CoreWeave has operated a growing footprint of data centers across the US and Europe.

CoreWeave valued at $23 billion in muted Nasdaq debut

(Reuters) -CoreWeave's shares closed flat after opening nearly 3% below their offer price in its Nasdaq debut on Friday, giving the Nvidia-backed AI infrastructure firm a valuation of $23 billion on a fully diluted basis. The lackluster performance could crush hopes of a meaningful recovery in IPOs, especially when equity markets are grappling with tariff-related turmoil. Wall Street stocks closed sharply lower on Friday, with the tech-heavy Nasdaq falling 2.7%. It could also dampen sentiment towards AI infrastructure amid rising uncertainty over Big Tech's massive spending spree and fears of competition from lower-cost options such as China's AI startup DeepSeek, which require fewer chips. The stock opened for trading at $39, compared with the IPO price of $40. CoreWeave had already taken a hit on Thursday, when it had to downsize its initial public offering. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the company's growth has been meteoric, its long-term sustainability is yet to be tested. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported on Thursday. Despite the downsize, the IPO was the largest AI-related listing by amount raised according to Dealogic, which has compiled data as far back as 1995. FINANCIAL RISKS Investors have previously driven AI-related companies such as Oracle and Microsoft to lofty valuations. Yet, both companies, which markets may view as comparables to CoreWeave, have fallen 13% and 7% this year, respectively. CoreWeave sparked worries among risk-averse investors during its roadshow as they weighed its long-term growth prospects, financial risks and capital intensity in a volatile market. "The infrastructure that you need to build and deliver artificial intelligence is one of the true super cycles that exist," CoreWeave CEO Mike Intrator said in an interview with Reuters. "Working with the clients who are building the infrastructure that will drive artificial intelligence, there has been no reduction in demand." Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. "The OpenAI contract... materially decreases the single client concentration, and we'll continue to do that over the next several years," Intrator told Reuters when asked about these concerns. CoreWeave signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, Reuters first reported earlier this month, forging ties with the most prominent startup in the industry. The company's executives also said their contracts with Microsoft haven't changed and they haven't seen any commitments canceled or withdrawn by the cloud giant. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge", Ethereum's 2022 upgrade, slashed rewards for miners. CoreWeave's revenue has grown at breakneck speed, climbing more than eight-fold last year. The company had around $8 billion in debt as of last year. It said earlier this month that it plans to use about $1 billion of the IPO proceeds to repay debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, JPMorgan and Goldman Sachs. (Reporting by Echo Wang and Krystal Hu in New York and Manya Saini and Niket Nishant in Bengaluru; Editing by Shounak Dasgupta, Pooja Desai and Diane Craft) By Echo Wang, Krystal Hu, Niket Nishant and Manya Saini

CoreWeave shares soar past IPO price on third trading day

(Reuters) -Artificial intelligence startup CoreWeave's shares closed up 42% at $52.57 on Tuesday, their third day of trading, above their initial public offering price of $40. At close, the company added more than $7 billion to its market value. On Friday, the Nvidia-backed stock debuted at $39, giving the AI infrastructure firm a valuation of $23 billion on a fully diluted basis. CoreWeave had already taken a hit on Thursday when it downsized its IPO. Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion, Reuters reported last week. Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge," Ethereum's 2022 upgrade, slashed rewards for miners. In its IPO filing earlier in March, CoreWeave reported revenue of $1.92 billion in 2024, compared with $228.9 million a year earlier. Its net loss widened to $863.4 million during the same period from $593.7 million in 2023. Roughly two-thirds of CoreWeave's revenue came from Microsoft, which is the company's biggest customer. (Reporting by Juby Babu in Mexico City, additional reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore and Alan Barona)