Jamie Spencer
AI-Driven Cloud Provider Plans to Raise Up to $2.7 Billion
CoreWeave, the Nvidia-backed cloud services provider specializing in AI workloads, is targeting a valuation of up to $32 billion in its highly anticipated U.S. initial public offering (IPO). The company aims to raise as much as $2.7 billion by offering 49 million shares priced between $47 and $55 each.
The listing is being closely watched as a key test for investor sentiment in the AI sector and could play a significant role in reviving the sluggish U.S. IPO market. Reuters first reported the IPO terms on Wednesday.
Strategic Partnerships with AI Leaders
CoreWeave has strengthened its market position through high-profile deals, including an $11.9 billion infrastructure contract with OpenAI, the maker of ChatGPT. As part of the IPO, CoreWeave will issue $350 million worth of shares to OpenAI via a private placement.
Currently, Nvidia owns 5.96% of CoreWeave’s Class A shares, a stake that will be diluted to 5.05% post-IPO.
Investor Confidence Hinges on AI Demand
The IPO is viewed as a litmus test for the AI-driven cloud computing market. Investors will assess whether specialized AI data centers, such as CoreWeave’s, can outpace traditional cloud giants like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
The offering follows mixed signals in the AI sector:
- Chinese startup DeepSeek launched a low-cost AI model, intensifying competition.
- Reports suggest that Microsoft is cutting back on data center leases, raising concerns about AI infrastructure demand.
- Rival Cerebras is reportedly preparing a 2025 IPO.
- Data center operator Switch is considering an IPO at a $40 billion valuation.
“There are growing concerns that the explosion in AI-related data center demand won’t be as strong as previously thought,” said Dan Coatsworth, investment analyst at AJ Bell.
CoreWeave’s Evolution: From Crypto Mining to AI Powerhouse
Founded in 2017 as a crypto mining operation, CoreWeave pivoted to AI-driven cloud computing after Ethereum’s 2022 upgrade, “The Merge”, which reduced mining rewards. This strategic shift has positioned CoreWeave as a leader in providing high-powered computing solutions for AI applications.
IPO Underwriters and Market Debut
Leading financial institutions including Morgan Stanley, J.P. Morgan, and Goldman Sachs are underwriting the IPO. CoreWeave plans to trade on the Nasdaq under the ticker symbol “CRWV”.
