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The backstory: CoreWeave is a rising player in cloud computing and artificial intelligence (AI). The company specializes in graphics processing unit (GPU) solutions in quick AI, machine learning and data analytics. Backed by tech giant Nvidia, CoreWeave took an early lead by adopting Nvidia's graphics chips for data centers, foreseeing the surge in demand for powerful processors in AI applications.
Nvidia, primarily known for gaming GPUs since 1999, saw its stock skyrocket by nearly 200% this year, solidifying its heavyweight status in AI. Tech giants like Amazon, Google, Meta and Microsoft are clamoring for its GPUs, integrating them into influential models like ChatGPT, the chatbot by OpenAI. Nvidia's market value has now crossed the US$1 trillion mark, placing it among giants like Apple and Alphabet.
More recently: This year, CoreWeave is thriving, securing US$421 million in equity. In August, CoreWeave sealed a US$2.3 billion debt financing deal (using Nvidia’s H100 chips as collateral), with Magnetar Capital and Blackstone leading and support from others like Coatue, DigitalBridge Credit, BlackRock, PIMCO and Carlyle. CoreWeave, previously known for ethereum mining, is reportedly expected to rake in around US$1.5 billion in revenue by 2024.
The development: CoreWeave has said it’s closed a deal selling a minority stake to some major players – including Fidelity Management & Research Co., Investment Management Corp. of Ontario, Jane Street, JPMorgan Asset Management, Nat Friedman, Daniel Gross, Goanna Capital and Zoom Ventures. This move, according to insiders, pushed the company’s value up to US$7 billion. CEO Michael Intrator is thrilled about the company's growth, pointing out the recognition from top-notch investors and underscoring its impressive performance and tech strength.
“Our explosive growth trajectory has been recognized by top-tier institutional investors and this transaction highlights the differentiation our market-leading performance, significant technology advantage and strong customer adoption is receiving in the market,” said Michael Intrator, co-founder and CEO of CoreWeave, in an emailed statement.
"We negotiated with them to find a schedule for how much collateral to go into it, what the depreciation schedule was going to be versus the payoff schedule," said Intrator in August, referring to the debt financing deal. "For us to go out and borrow money against the asset base is a very cost-effective way to access the debt markets."