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CoreWeave Scales Back IPO Amid Investor Caution

Mar 28, 2025 - cloudtweaks.com
CoreWeave has scaled back its U.S. initial public offering, reducing the number of shares from 49 million to 37.5 million and pricing them at $40 each, below the initially expected range of $47 to $55. This adjustment reflects weaker investor interest in AI infrastructure IPOs, with the sale expected to raise approximately $1.5 billion and value the company at around $23 billion. Nvidia has committed to a $250 million order to anchor the IPO. Concerns about CoreWeave's long-term growth prospects, financial risks, and its capital-intensive business model, including significant lease liabilities of $2.6 billion, have contributed to the tepid response. The company's reliance on Microsoft and competition from China's DeepSeek are additional factors affecting investor sentiment.

Despite these challenges, CoreWeave plays a critical role in AI infrastructure, having deployed over 250,000 Nvidia GPUs. The company plans to use $1 billion from the IPO proceeds to repay debt, which stood at approximately $8 billion last year. CoreWeave has yet to turn a profit, which adds to investor hesitancy, as recent IPOs have favored profitable firms. Ahead of the IPO, CoreWeave secured significant partnerships, including an $11.9 billion infrastructure deal with OpenAI, which will also receive $350 million in shares through a private placement. The revised offering reflects broader market uncertainty, with U.S.-listed equity capital market deals declining in both number and value.

Key takeaways:

  • CoreWeave reduced its IPO size and priced shares below the expected range, indicating weaker investor interest in AI infrastructure IPOs.
  • The company is selling 37.5 million shares at $40 each, a 23.5% reduction from its original plan, with Nvidia anchoring the IPO with a $250 million order.
  • Concerns about CoreWeave's long-term growth prospects, financial risks, and reliance on Microsoft have contributed to the lukewarm reception of the IPO.
  • Despite securing major partnerships, including an $11.9 billion deal with OpenAI, CoreWeave's significant debt and lack of profitability have added to investor hesitancy.
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