Summary Bullets:
• CoreWeave’s IPO was the first time an AI startup went public since the beginning of the generative AI (GenAI) boom.
• The IPO market has been very slow against the backdrop of an increasingly volatile geopolitical environment.
The data center operator CoreWeave made headlines as it went public last week. Its IPO, initially estimated to reach up to $32 billion, went down to $23 billion in the days prior to its stock market debut. CoreWeave rents out computing power to big tech companies building out large language models (LLMs). The company relies heavily on two major customers: Microsoft and OpenAI. The latter, alongside Nvidia, is a stakeholder in CoreWeave.
The drama surrounding the IPO was significant. Not only was it the largest tech IPO in years, it also highlights the still controversial nature of GenAI investments, specifically the market of AI accelerators. The launch echoes a similar (but unsuccessful) attempt to go public by AI chipmaker Cerebras in 2024. For more information on Cerebras’ offerings, and the overall landscape of AI accelerators, please see GlobalData’s report From CPUs to TPUs, a look at Integrated Circuits and their Role in AI, March 27, 2025.
CoreWeave was founded in 2017 under the moniker Atlantic Crypto, and originally was focused on the crypto boom, but changed its strategy in 2019, shifting toward AI. It had the incredible foresight of hoarding Nvidia chips very early on, and it now leases computing power not only to Microsoft and OpenAI, but also Meta and IBM. As is becoming the norm with this type of startup (think OpenAI), the governance structure veers toward the unorthodox: CoreWeave has 10 directors who own 30% of the company but have over 80% of the voting rights. This has probably not helped assuage investor doubts about the long-term stability of the company. To be fair, the timing of the IPO is also partly to blame for its rocky debut, with the new US administration provoking shockwaves through the financial world with levels of unpredictability that have not helped valuations across the board, and not just in the volatile tech sector.
CoreWeave’s stratospheric levels of debt should surprise no one who has been paying attention to Nvidia’s pricing structure. Although the market of integrated circuits is becoming increasingly competitive, it can be argued that hoarding Nvidia semiconductors remains for the time being a relatively safe bet. Nevertheless, investors got the jitters, and who can blame them: The company relies on two major customers that account for 77% of sales, and it will need to spend billions to keep up with Nvidia’s newly-accelerated GPU refresh lifecycle. Shares of CoreWeave fell more than 5% in their stock market debut last Friday, but by the close, it had recouped losses to close to 2.5% over the initial trade of $39 a share. The company’s main financer is Blackstone.
CoreWeave’s IPO marked a landmark moment in the AI landscape, its ambitious public debut could be a harbinger of more startups going public and strengthen the market. However, it also signaled a willingness to adopt a measured approach to risky AI bets, a certain wariness amid a marked economic uncertainty. For AI observers, it will be interesting to watch the evolution of the company.