CoreWeave’s stock opened at $39 per share in its Nasdaq debut on Friday, following its initial share sale at $40 per share. This marked the largest U.S. tech IPO since 2021, raising $1.5 billion for the artificial intelligence technology company.
The IPO has caught the attention of investors from Wall Street to Silicon Valley, as CoreWeave is the first pure-play AI IPO and the biggest tech debut in the U.S. in four years. The IPO market had been quiet since late 2021, when rising inflation and interest rates slowed tech offerings.
CoreWeave, a supplier of cloud-based AI services, is benefiting from the generative AI boom, especially after the launch of ChatGPT in late 2022. As a supplier to OpenAI, CoreWeave plays a crucial role in the expanding AI space. Microsoft, which provides cloud services to OpenAI, is CoreWeave’s largest customer, accounting for 62% of its $1.92 billion in revenue last year.
The company rents access to Nvidia graphics processing units (GPUs) to large tech and AI companies, including Meta, IBM, and Cohere. CoreWeave’s primary competition comes from top cloud vendors like Microsoft, Amazon, Google, and Oracle.
Despite its rapid revenue growth, CoreWeave reported a net loss of $863 million last year. The company’s business is capital-intensive due to the high costs of running data centers and renting GPUs. To fund this, CoreWeave has raised nearly $13 billion in debt, largely for GPUs in its U.S. and international facilities.
CoreWeave initially aimed for a higher price target of $47 to $55 per share, hoping to raise about $2.5 billion. However, the company reduced the offering amid investor concerns about the macroeconomic environment. CoreWeave CEO Michael Intrator acknowledged the challenges on CNBC, stating, “There’s a lot of headwinds in the macro…we definitely had to scale or rightsize the transaction for where the buying interest was.”
CoreWeave’s offering is the largest U.S. IPO since UiPath’s $1.57 billion debut in 2021. The company’s success may spark more AI-related IPOs, according to Mark Klein, CEO of SuRo Capital. “If the deal trades well, we may see an ‘AI parade’ to the public markets,” Klein said.
Other tech companies like Hinge Health, Klarna, and StubHub have also followed CoreWeave’s lead, filing for IPOs recently. Digital analytics firm Databricks raised funds at a $62 billion valuation in December, while OpenAI neared a $260 billion valuation last month.
Founded in 2017, CoreWeave is based in Livingston, New Jersey. As of the end of 2024, the company employed 881 people. Prior to the IPO, Intrator held 38% of CoreWeave’s voting power, while Nvidia controlled 1%. Other investors include Fidelity and Magnetar.
CoreWeave’s debut is seen as a major milestone for AI-related companies looking to go public. The company’s performance on the stock market could signal future trends for the rapidly growing AI sector.
