AI cloud provider startup CoreWeave gears up for 2025 IPO amidst surging GPU demands

The AI boom that began with the launch of ChatGPT in November 2022 has led to surging demand for the graphics processing units (GPUs) essential for powering AI data centers. One notable beneficiary of this surge is CoreWeave, an Nvidia-backed cloud computing startup that provides the computational power necessary for complex AI tasks.

CoreWeave has recently attracted significant investment from major Wall Street players, including Magnetar Capital and Nvidia. According to a report from The Information, the startup is now gearing up for an initial public offering (IPO).

A source familiar with CoreWeave’s plans revealed that the company has initiated early preparations to go public by the first half of next year. This anticipated IPO could become the largest AI-focused public offering following a substantial influx of funding into private firms. The move also signals a rare revival in the U.S. tech IPO market.

“The startup has started early preparations to go public by the first half of next year, said a person with direct knowledge of the company’s plans. The plans set up what would be the largest AI-focused initial public offering after the recent wave of funding for private firms in the sector. The moves toward a listing are also a rare sign of life in the U.S. tech IPO market,” The Information reported.

Early this month, CoreWeave raised $1.1 billion in a funding round, catapulting its valuation to $19 billion—nearly three times its earlier valuation. Additionally, the company secured a $7.5 billion debt package from private equity firms, further solidifying its financial standing.

We also covered the New York City-based CoreWeave in May 2023 after it secured $200 million to fund its expansion to build six data centers across the U.S. and potential future acquisition opportunities.

Founded in 2017 by Intrator, Brian Venturo, and Brannin McBee to address what they saw as “a void” in the cloud market, CoreWeave started as an Ethereum mining venture. The startup 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 was 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 for AI work to set itself apart. Unlike 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.