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CoreWeave IPO: Nvidia-backed AI startup to raise $2.5 billion via public issue, asks investors to pay $47-$55/share

CoreWeave IPO: Nvidia-backed AI startup to raise $2.5 billion via public issue, asks investors to pay $47-$55/share

  • 20.03.2025 10:21
  • livemint.com
  • Keywords: AI, Startup

Nvidia-backed AI startup CoreWeave aims to raise $2.5 billion through its IPO, offering shares at $47-$55 each. The company has secured a $11.9 billion deal with OpenAI and reported $1.9 billion in 2024 revenue with a net loss of $863 million.

Nvidia NewsMS/PLsentiment_satisfiedJPM/PJsentiment_satisfiedGS/PAsentiment_satisfiedNVDAsentiment_satisfiedMSFTsentiment_satisfiedFISsentiment_satisfied

Estimated market influence

CoreWeave

Positivesentiment_satisfied
Analyst rating: N/A

Nvidia-backed AI startup raising $2.5 billion in IPO, leading in AI infrastructure for OpenAI and Microsoft.

Morgan Stanley

Positivesentiment_satisfied
Analyst rating: —

Leading the IPO with other banks to raise funds for CoreWeave's expansion.

JPMorgan

Positivesentiment_satisfied
Analyst rating: —

Participating in the IPO and providing financial support to CoreWeave.

Goldman Sachs

Positivesentiment_satisfied
Analyst rating: —

Leading the IPO alongside Morgan Stanley and JPMorgan, aiding CoreWeave's growth.

Nvidia

Nvidia

Positivesentiment_satisfied
Analyst rating: Strong buy

Backer of CoreWeave, contributing to its success in AI infrastructure.

Microsoft

Microsoft

Positivesentiment_satisfied
Analyst rating: Strong buy

Major customer and investor in CoreWeave, supporting its growth in AI cloud services.

OpenAI Inc.

Positivesentiment_satisfied
Analyst rating: N/A

Received AI infrastructure worth up to $11.9 billion from CoreWeave, enhancing their capabilities.

Weights & Biases

Positivesentiment_satisfied
Analyst rating: N/A

Acquired by CoreWeave to strengthen its AI developer platform offerings.

Magnetar Capital

Positivesentiment_satisfied
Analyst rating: N/A

Investor in CoreWeave, supporting its expansion and market presence.

Coatue Management

Positivesentiment_satisfied
Analyst rating: N/A

Investor providing financial backing to CoreWeave's operations.

Jane Street

Positivesentiment_satisfied
Analyst rating: N/A

Investor contributing to CoreWeave's capital and growth strategy.

Fidelity

Fidelity

Positivesentiment_satisfied
Analyst rating: Buy

Investor supporting CoreWeave's expansion in the AI cloud market.

Lykos Global Management

Positivesentiment_satisfied
Analyst rating: N/A

Providing investment to strengthen CoreWeave's financial position.

Cisco Systems Inc.

Positivesentiment_satisfied
Analyst rating: N/A

Invested in CoreWeave, valuing it at $23 billion and supporting its growth.

JPMorgan Asset Management

Positivesentiment_satisfied
Analyst rating: N/A

Providing financial support through investments and credit facilities to CoreWeave.

Bloomberg News

Neutralsentiment_neutral
Analyst rating: N/A

Reported on CoreWeave's investment from Cisco Systems Inc. in October 2024.

Context

CoreWeave IPO Analysis: Business Insights and Market Implications

  • IPO Details

    • Targeting $2.5 billion raise via public issue.
    • Proposed share price range: $47-$55 per share.

  • Revenue and Financials

    • 2024 revenue: $1.9 billion (up from $229 million in 2023).
    • Net loss in 2024: $863 million (vs. $594 million in 2023).

  • Customer Concentration

    • 77% of revenue from top two customers in 2024.
    • Microsoft accounted for nearly two-thirds of total sales.

  • Strategic Deals and Acquisitions

    • Secured a $11.9 billion AI infrastructure deal with OpenAI, receiving $350 million worth of CoreWeave stock.
    • Agreed to acquire AI developer platform Weights & Biases for 1 million shares of Class A CoreWeave shares, expected to close in H1 2025.

  • Investors and Backing

    • Backed by Nvidia, Magnetar Capital, Coatue Management, Jane Street, JPMorgan Asset Management, Fidelity, Lykos Global Management, and Cisco Systems (valuing CoreWeave at $23 billion).
    • Secured a $650 million credit facility led by JPMorgan Chase, Goldman Sachs, and Morgan Stanley.

  • Financial Risks

    • Identified material weaknesses in internal controls over financial reporting.
    • Issues include insufficient IT controls and lack of qualified personnel.

  • Founder's Influence

    • Co-founder and CEO Michael Intrator controls 38% voting power, with Nvidia holding 1.2% and Magnetar at 7.2%.

  • Market Position and Competition

    • Early adopter of Nvidia’s graphics chips for data centers, positioning itself as a leader in AI-related computing infrastructure.
    • Faces competition from other cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

  • Long-Term Implications

    • IPO proceeds will likely be used to expand data center capacity and enhance AI capabilities.
    • Deal with OpenAI underscores CoreWeave’s role in the growing AI infrastructure market.

  • Regulatory Considerations

    • Potential regulatory scrutiny due to high customer concentration and reliance on major tech partners.

  • Strategic Importance of AI Cloud Infrastructure

    • CoreWeave’s focus on AI-specific cloud computing highlights the growing demand for specialized infrastructure to support advanced AI applications.
    • Nvidia’s partnership underscores its dominance in AI chips and its strategic investments in complementary startups.