CoreWeave Inc. may have stumbled out of the IPO gate last week, but the NVIDIA Corp.-backed artificial intelligence (AI) cloud company is showing strong signs of life in trading this week — and that could mean encouraging news for a group of tech firms lined up for initial public offerings (IPOs).
A two-day, 65% pop in the stock has all but erased a tepid initial public offering Friday that extended into Monday.
On Tuesday, its third day of trading, CoreWeave’s stock jumped 42%, adding more than $7 billion to its market value, to about $25 billion, and it continued to climb Wednesday.
Shares of the company which rents access to NVIDIA’s graphics processing units (GPUs) to other technology companies, opened at $39 on Friday and closed flat. Its initial performance shook investors, who were expecting big things from the largest venture-backed tech IPO for a U.S. company since 2021.
The hope was that CoreWeave, which was founded as a crypto miner in 2017, would open the IPO faucet for StubHub, Klarna and others — even OpenAI, which just landed $40 billion in funding from Japanese tech investment firm SoftBank Group, a deal contingent on the ChatGPT maker transitioning to a for-profit company by the end of the year. Under a restructuring, OpenAI could file for an IPO as early as 2026.
CoreWeave counts NVIDIA, OpenAI and Microsoft Corp. among its customers. It has currently a $320 million deal with NVIDIA (which also invested $100 million), in addition to a multiyear deal with Microsoft to raise $1.6 billion in equity and $12.9 billion in debt commitments.
Last month, CoreWeave signed a five-year, $11.9 billion deal with OpenAI to provide AI infrastructure services. As part of the deal, OpenAI said it would receive $350 million in shares of CoreWeave through a private placement. The stake was tied to CoreWeave’s IPO, Reuters reported.
At the time, OpenAI CEO Sam Altman called CoreWeave “an important addition to OpenAI’s infrastructure portfolio, complementing our commercial deals with Microsoft and Oracle, and our joint venture with Softbank on Stargate [a $500 billion AI infrastructure initiative in the U.S. over four years].”
CoreWeave competes with heavyweights Amazon.com Inc., Alphabet Inc.’s Google, and Oracle Corp. In its prospectus filed in March, CoreWeave said revenue soared 737% to $1.92 billion last year, though it also reported a net loss of $863 million.
