CoreWeave seeks US$26b valuation in pared back IPO
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The news: AI provider CoreWeave said it is targeting a valuation of up to USD26 billion ($41.4 billion) in its US initial public offering.
The numbers: The Nvidia-backed company is marketing the sale at USD47-$55 per share. CoreWeave plans to sell around 47 million shares while existing stockholders are offering the remaining 1.8 million. At the top of the share price range, CoreWeave would have a market valuation of USD26 billion.
The context: The target valuation is a lower figure than the USD4 billion investors and bankers had reportedly sought to raise, in the hopes of achieving a USD35 billion valuation.
Over 75% of CoreWeave’s revenue comes from two key customers, one of which being Microsoft. Earlier this month the FT reported that Microsoft is walking away from certain agreements it had made with the cloud computing provider over delivery issues and missed deadlines. Under five contracts with CoreWeave, Microsoft had agreed to spend over USD10 billion with the company by 2030. Deals with Microsoft amounted to 62% of CoreWeave’s total 2024 revenues.
The AI provider also has two deals to complete ahead of its IPO, one to deliver AI infrastructure to OpenAI for up to USD11.9 billion, and the second being the acquisition of AI developer platform Weights & Biases for about 1 million shares of Class A CoreWeave shares.
In its original IPO filings CoreWeave has said that it is vulnerable to potential delays in its supply chain given its large exposure to Nvidia, and is also managing material weaknesses in its internal controls over financial reporting.
The success of the listing is viewed as pivotal to the revival of the US IPO market, as well as a bellwether for generative AI appetite.
The sources: CoreWeave SEC filing, Bloomberg
