AI infrastructure startup CoreWeave is seeking a valuation of up to US$32 billion in its upcoming IPO on the NASDAQ, with plans to raise as much as US$2.7 billion. The listing marks a major test of investor confidence in a new generation of AI-focused cloud providers as uncertainty clouds the future of data center demand.
CoreWeave's IPO arrives as China's DeepSeek gains traction with ultra-low-cost AI models, stoking doubts about long-term demand for expensive AI infrastructure. Analysts at AJ Bell warn that expectations for data center growth may be overblown, prompting some investors to seek lower entry prices or delay participation in the IPO.
IPO mechanics, Nvidia ties, and the "neocloud" narrative
CoreWeave plans to sell 49 million shares priced between US$47 and US$55, according to Reuters and The Financial Times. The company is positioning itself as a top-tier AI compute provider, hoping to attract buyers despite waning enthusiasm across the broader tech IPO landscape.
The company signed a US$11.9 billion, five-year agreement with OpenAI, granting access to CoreWeave's AI infrastructure. OpenAI will receive US$350 million in CoreWeave shares during the IPO. Microsoft, which supports OpenAI via its Azure cloud, also partnered with CoreWeave in 2023 to meet soaring GPU demand following ChatGPT's breakout launch.
Nvidia, CoreWeave's main GPU supplier, also holds a 5.96% stake in the company—expected to dilute to 5.05% after the IPO. By the end of 2024, CoreWeave had deployed over 250,000 Nvidia GPUs across 32 data centers, most running on the Hopper architecture. The company's active power usage exceeds 360 megawatts, with total contracted capacity reaching 1.3 gigawatts.
CoreWeave belongs to a class of "neocloud" startups—including Crusoe, Nebius, and Lambda—focused exclusively on AI-centric infrastructure. Unlike hyperscalers such as Amazon, Google, Microsoft, and Oracle, these firms target GPU-heavy workloads with greater flexibility and more competitive pricing.
CoreWeave's fourth-quarter results highlight its rapid growth: the company reported US$747.4 million in revenue and a 76% gross margin. Operating income hit US$112.7 million, but steep interest costs led to a net loss of US$51.4 million. Total debt stood at nearly US$8 billion by year-end.
From crypto roots to AI cloud powerhouse
CoreWeave was founded in 2017 as Atlantic Crypto, initially focused on Ethereum mining infrastructure. When crypto prices slumped, the company pivoted, stockpiling GPUs and transitioning to AI rendering and compute workloads. The rebrand to CoreWeave marked its shift to cloud infrastructure.
CEO and co-founder Michael Intrator has criticized legacy cloud providers as inflexible and overpriced, saying GPU-dependent businesses require tailored infrastructure. Ahead of the IPO, Intrator holds 38% of voting rights, while Magnetar owns 7% and Nvidia about 1% on a diluted basis.
CoreWeave CEO, Michael Intrator. Credit: Forbes
Morgan Stanley is leading CoreWeave's IPO, with JPMorgan and Goldman Sachs as co-managers. The listing comes during a lull in tech IPO activity, following recent debuts from ServiceTitan, Rubrik, and Reddit, amid investor caution fueled by high interest rates and inflation.
AI chipmaker Cerebras also filed for an IPO in September, but the process has reportedly stalled due to scrutiny from the Committee on Foreign Investment in the United States (CFIUS).
Microsoft CEO Satya Nadella described the GPU surge following ChatGPT's release as a lightning strike, forcing a shift from conservative provisioning to aggressive scaling. Though he once called GPU leasing a one-time event, he recently confirmed Microsoft's expansion plans extend through 2028.
In January, OpenAI unveiled a US$500 billion Stargate data center initiative with Arm and Oracle. Microsoft secured first-refusal rights on future CoreWeave capacity, underscoring the startup's growing strategic role in the AI compute supply chain.
CoreWeave faces off in a crowded AI infrastructure arena
CoreWeave competes head-to-head with Microsoft, Amazon, Google, Oracle, and rising players like Crusoe and Lambda in the escalating battle to dominate AI infrastructure.
More than a capital raise, CoreWeave's IPO is a bellwether for investor sentiment on AI infrastructure. With mounting concerns over demand durability, costs, and competition, the offering could signal the direction of the AI data center market going forward.
Article translated by Levi Li and edited by Jack Wu
