Nvidia Bets Big on AI as CoreWeave Preps for Lower-Priced IPO

Nvidia is planning to invest $250 million in the IPO of the cloud computing company CoreWeave, with a proposed share price of $40. This price is lower than the previously submitted range of $47 to $55 per share, indicating that the company might be considering reducing its fundraising goals.

CoreWeave has not yet made a definitive decision to scale down its offering, but discussions have been ongoing with investors. The company is expected to officially go public this Friday.

Neither CoreWeave nor Nvidia have immediately responded to requests for comments on the IPO and the pricing adjustment. Currently, Nvidia is not only one of CoreWeave's significant customers but also holds approximately a 6% equity stake in the company. The move to participate further in CoreWeave's IPO underscores Nvidia's confidence and strategic interest in the evolving AI-driven cloud computing sector.

CoreWeave originated in 2017 as Atlantic Crypto, focusing on cryptocurrency mining infrastructure. As cryptocurrency prices experienced dramatic fluctuations, CoreWeave pivoted its business towards AI cloud computing and rebranded itself. Throughout this transition, the company heavily acquired Nvidia's GPUs to provide AI chip-based remote computing services to its clients.

The company's strategic shift appears to be a winning decision. According to the IPO prospectus submitted earlier this month, CoreWeave reported 2024 revenues of $1.92 billion, marking an impressive increase of over 700%, although it also recorded a net loss of $863 million. A significant portion of its revenue, 77%, is derived from two major customers, with Microsoft alone accounting for 62%.

By the end of 2024, CoreWeave reported possession of 32 data centers and deployment of more than 250,000 Nvidia GPUs, illustrating its substantial investments in AI infrastructure.

The U.S. IPO market has struggled for the past three years due to high inflation and rising interest rates leading investors to steer clear of high-risk assets. However, with the rapid advancement of the AI industry, the market sees new potential for revival. CoreWeave's imminent listing is viewed as a significant indicator of renewed activity in the IPO landscape.

Alongside CoreWeave, companies like StubHub, Hinge Health, and Klarna are also preparing for market debuts, and investors are closely monitoring how these entities might rejuvenate the primary market, which has been quiet for a while.