CoreWeave, currently one of the largest suppliers for OpenAI, recently went public on the Nasdaq under the ticker symbol “CRWV.” This would be the largest tech initial public offering (IPO) in the U.S. since 2021. The company’s stock opened at $39 per share after pricing shares at $40 each, just under what was expected. This IPO has raised $1.5 billion, a record for U.S. tech offerings since automation software maker UiPath’s New York Stock Exchange debut in 2021.
Founded in 2017, CoreWeave is based in Livingston, New Jersey. Since the debut of ChatGPT at the end of last year, OpenAI has established itself as one of the big three companies dominating the generative AI space. OpenAI’s largest supplier is CoreWeave, a company that has deep ties to the GOP. They lease access to well over 1 million Nvidia graphics processing units (GPUs) for the big tech and AI companies. Microsoft stands as CoreWeave’s largest customer, contributing 62% to the company’s revenue, which soared to $1.92 billion last year.
Despite its impressive revenue growth of 737% from the previous year, CoreWeave reported a net loss of $863 million last year. The company has raised close to $13 billion in debt. Now, a good chunk of this funding still goes towards planes on borrowed tarmacs around the U.S. and beyond. Nvidia’s control over CoreWeave’s operations has a huge impact due to its market dominance. By December 31, it had done so to an astounding tune of $320 million as a customer, supplier and investor.
CoreWeave has immediate and intense competition from leading cloud vendors including Microsoft, Amazon, Google and Oracle. These titans of industry are some of the biggest challenges yet as they deepen and widen their rapidly growing cloud computing empires. Now, with the ascendance of generative AI, CoreWeave is playing with a competitive advantage of its own. Its strategic positioning and partnerships, particularly with Nvidia and Microsoft, are key to this advantage.
The company’s CEO, Michael Intrator, acknowledged the challenges ahead during an appearance on CNBC’s “Squawk Box.”
“There’s a lot of headwinds in the macro,” – Michael Intrator
Even with these headwinds, CoreWeave’s IPO has the potential to light the fire for more AI-oriented companies to list publicly soon. Mark Klein, CEO of SuRo Capital, suggested that CoreWeave’s successful entry into the public markets might spark an “AI parade” among tech companies.