CoreWeave, a GPU-focused cloud compute provider startup, raises another $200M in funding amid AI boom
CoreWeave, a New York City-based startup that started out as an Ethereum mining venture, has secured another $200 million in funding amid the ongoing AI boom.
The funding, which pushes the valuation of the 6-year-old startup to more than $2 billion, comes weeks after the company raised $221 million in a Series B funding to support the expansion of its U.S.-based data centers. The April funding round was backed by investors including Magnetar Capital and Nvidia.
Founded in 2017 by Intrator, Brian Venturo, and Brannin McBee to address what they saw as “a void” in the cloud market, CoreWeave specializes in providing cloud computing services based on graphics processing units (GPUs), the category of chip pioneered by Nvidia that has become central to artificial intelligence (AI) services like OpenAI’s ChatGPT.
In an interview, CoreWeave co-founder and chief strategy officer Brannin McBee said the company will use the new capital infusion to fund its expansion to build out six data centers across the U.S. and for potential future acquisition opportunities. McBee also added that the company is in talks with lenders to raise debt for GPU purchases.
“We’re the only provider of that infrastructure at scale and an InfiniBand environment,” McBee said. “Nvidia wants their products to be as good as possible and to be accessible. We hit both those checkboxes for them the way that no one else does.”
CoreWeave, which originally catered to the cryptocurrency mining sector, has experienced significant expansion after transitioning its focus to artificial intelligence (AI). The AI industry has witnessed substantial growth, with numerous startups raising over $12 billion in funding during the first quarter of 2023, triggered by the success of ChatGPT and the ensuing market frenzy.
CoreWeave also offers computing power to AI companies, positioning itself as a competitor to major cloud computing service providers like Microsoft Azure and Amazon’s AWS.
McBee said that CoreWeave also adopts a unique approach in constructing its data centers specifically for AI work to set itself apart. Unlike the conventional use of Ethernet cables in most data centers, CoreWeave utilizes a networking technology called InfiniBand to interconnect computers. This innovative infrastructure is designed to enhance performance and optimize AI processing capabilities, setting CoreWeave apart in the market.