CoreWeave, a cloud computing provider known for supplying Nvidia GPUs to companies such as Meta and Microsoft, has filed for an initial public offering (IPO) on Nasdaq under the ticker CRWV.
As reported by CNBC, CoreWeave reported a 700% boost in revenue in 2024, reaching $1.92 billion, while recording a net loss of $863.4 million in its initial public offering. The company’s growth has been fueled by contracts worth over $15 billion, though 77% of its revenue came from just two customers, with Microsoft accounting for 62% of total earnings.
For Q4 2024, CoreWeave generated $747.4 million in revenue, with a gross margin of 76%. Despite an operating income of $112.7 million, the corporation reported a net loss of $51.4 million, largely due to interest expenses. By the end of the year, its debt had reached nearly $8 billion.
Evolution from crypto mining to AI infrastructure
CoreWeave started in 2017 as Atlantic Crypto, initially focusing on Ethereum mining infrastructure. As cryptocurrency prices declined, the company switched its business model to AI and cloud computing, acquiring more graphics processing units (GPUs) and rebranding as CoreWeave to serve the growing demand for high-performance computing.
CEO Michael Intrator, who holds 38% voting power, explained the company’s transition in a 2021 blog post, claiming that businesses relying on GPU acceleration frequently struggled with legacy cloud providers that offered limited compute options at high prices. CoreWeave set out to deliver more scalable and cost-effective solutions, attracting AI developers and cloud computing clients.
By the end of 2024, CoreWeave will operate 32 data centres housing over 250,000 Nvidia GPUs, the majority of which will be running on Nvidia’s Hopper architecture. Nvidia’s Blackwell GPUs entered full production in November, further expanding the company’s computing capacity. The company has also contracted 1.3 gigawatts of power to support its infrastructure, with 360 megawatts currently in use.
Strategic partnerships and market competition
CoreWeave gained significant traction in AI infrastructure following OpenAI’s release of ChatGPT in late 2022. The corporation quickly became a key GPU supplier, resulting in a partnership with Microsoft in 2023 to help meet OpenAI’s computing needs.
Microsoft CEO Satya Nadella confirmed the unexpected surge in AI demand in a November 2023 podcast, saying: “What happened in November of ’22, like, that was just a bolt from the blue, right? So we had to catch up.”
While Nadella initially referred to GPU leasing as a one-time event, he later confirmed that Microsoft will continue renting GPU capacity through at least 2027 and 2028.
Microsoft remains CoreWeave’s largest customer, but also a competitor, alongside Amazon, Google, Oracle, and smaller cloud providers like Crusoe and Lambda. The cloud computing and AI infrastructure market has gotten more competitive, with major players investing heavily in GPU capacity and AI-driven cloud services.
Expansion through acquisitions and infrastructure investments
To strengthen its AI cloud offerings, CoreWeave is acquiring Weights & Biases, a platform widely used by AI researchers and engineers for managing machine learning workflows, for $1.7 billion. The acquisition, which is expected to finalise in the first half of 2025, aims to integrate CoreWeave’s cloud computing infrastructure with Weights & Biases’ development tools, resulting in a more seamless experience for AI developers.
Additionally, CoreWeave is partnering with bitcoin miner Core Scientific to build 500 megawatts of infrastructure dedicated to AI-related workloads. This partnership is part of a broader effort to enhance AI compute capacity as demand for GPU-driven workloads increases.
IPO challenges and market conditions
CoreWeave is launching its IPO at a time when IT listings are scarce. The tech IPO market has been slow since late 2021, when rising interest rates and inflation concerns led investors to withdraw from high-risk growth stocks.
Recent public offerings, such as ServiceTitan in December and Reddit in March, were some of the first major venture-backed tech IPOs in years. Meanwhile, AI chipmaker Cerebras filed for an IPO in September 2024, but the process has been pushed out due to a review by the Treasury Department’s Committee on Foreign Investment in the US (CFIUS).
CoreWeave relies heavily on Nvidia GPUs manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC). The company stated in its statement that any geopolitical tensions involving China and Taiwan could disrupt its supply chain and operations, posing a major business risk.
(Photo by Unsplash)
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