Operating Data Centers with AI Chips... AI Startup
Nvidia Already Holds 6% Stake in CoreWeave
IPO Size Significantly Reduced... Weakened Demand for AI Infrastructure Investment
Artificial intelligence (AI) leader Nvidia plans to purchase a large amount of shares in CoreWeave, considered the biggest IPO candidate in the U.S. market this year, CNBC reported on the 27th (local time).
Sources said Nvidia plans to buy CoreWeave shares at $40 per share for a total of $250 million (approximately 366.1 billion KRW) ahead of CoreWeave’s listing on the New York Stock Exchange.
CoreWeave is an AI startup that operates large-scale data centers using Nvidia’s AI chips and leases them out. Nvidia invested in CoreWeave in 2023 and is currently known to hold a 6% stake. If it purchases additional shares in this IPO, its stake is expected to increase further.
As of the end of 2024, CoreWeave operates 32 data centers and owns more than 250,000 Nvidia graphics processing units (GPUs).
It counts Microsoft (MS) as a major customer and recently signed a cloud computing service contract worth over $10 billion with OpenAI, the developer of ChatGPT. Last year, its revenue was $1.92 billion, about eight times higher than the previous year ($228.9 million). However, its net loss also increased from $593.7 million in 2023 to $863.4 million.
CoreWeave’s valuation is estimated to be around $23 billion. During initial discussions, the company was valued at over $35 billion. Considering that its valuation was $19 billion when it raised $1.1 billion in early May last year, its value has risen by about 21%. Global investment banks such as Morgan Stanley, JP Morgan, and Goldman Sachs are expected to participate as joint lead underwriters for the listing.
CNBC stated, "As the rapidly growing AI industry attracts billions of dollars in investments from major tech companies, CoreWeave’s IPO will be an important milestone in the IPO market."
The Financial Times (FT) reported on the same day that CoreWeave plans to significantly reduce the size and valuation of its IPO and bring Nvidia on as a major investor, calling this "another sign that investor demand for AI infrastructure on Wall Street is wavering." According to sources, CoreWeave is expected to set its share price late today and reduce the offering amount to about $1.5 billion.
Earlier, CoreWeave aimed to raise $4 billion through the IPO but recently scaled down the fundraising target to $2.7 billion. Sources said, "The size and price of the deal may still change before the IPO."
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