CoreWeave, the Nvidia-powered artificial intelligence startup, recently announced a five-year contract with OpenAI, with a total contract of up to $11.9 billion. This major deal not only brings huge business opportunities to CoreWeave, but also provides strong support for its upcoming initial public offering (IPO).
According to an official statement from CoreWeave, the company will provide OpenAI with advanced AI infrastructure to further consolidate the cooperation between the two parties. It is worth noting that OpenAI will acquire some shares of CoreWeave through private placement, which is expected to be worth US$350 million. However, CoreWeave does not receive direct benefits from this deal.
Sam Altman, CEO of OpenAI, said: "CoreWeave is an important part of our infrastructure portfolio, which complements our business cooperation with Microsoft, Oracle and SoftBank's Stargate joint venture." This cooperation not only enhances OpenAI's technical capabilities, but also provides a solid market foundation for CoreWeave's IPO.
Founded in 2017, CoreWeave focuses on providing access to data centers and high-performance chips for AI workloads, relying primarily on Nvidia’s products. The company is competing with cloud service providers such as Microsoft's Azure and Amazon's AWS, with customers including tech giants such as Meta, IBM and Microsoft. CoreWeave reportedly has a target valuation of more than $35 billion in its upcoming IPO.
In its recent IPO application, CoreWeave disclosed its revenue in 2024 was $1.92 billion, a significant increase from $228.9 million in 2023. However, the company's net loss also expanded to $863.4 million from $593.7 million in 2023. Currently, about two-thirds of revenue comes from Microsoft, which is also CoreWeave's largest customer.
CoreWeave has raised more than $14.5 billion in debt and equity in past financing, including a round of more than $7 billion in private debt financing completed last year, becoming one of the largest financings in history. Morgan Stanley, JPMorgan Chase and Goldman Sachs are the major underwriters of CoreWeave's upcoming listing. CoreWeave's shares are expected to be traded on the Nasdaq under the CRWV code.
In general, CoreWeave’s $11.9 billion contract with OpenAI not only strengthens the partnership between the two parties, but also provides important market support for CoreWeave’s IPO. As interest in generative AI increases dramatically, investors' demand for AI infrastructure has also increased significantly, and CoreWeave is expected to occupy an important position in the future market.