CoreWeave, an artificial intelligence startup backed by Nvidia, has secured a five-year contract worth $11.9 billion with OpenAI. This partnership is a significant step for both companies as it positions CoreWeave as a key provider of AI infrastructure to OpenAI.
The agreement also includes a stake in CoreWeave for OpenAI, with the ChatGPT creator receiving $350 million worth of shares through a private placement at the time of CoreWeave’s initial public offering. However, CoreWeave will not receive any direct financial proceeds from this share issuance.
This collaboration strengthens OpenAI’s infrastructure ecosystem, adding to its existing commercial deals with Microsoft and Oracle, as well as its joint venture with SoftBank on Stargate. OpenAI CEO Sam Altman acknowledged CoreWeave’s role as a valuable addition to its infrastructure portfolio. The deal also serves as a significant milestone for CoreWeave ahead of its highly anticipated IPO, which is expected to be a major highlight in the U.S. stock market in 2025.
Investor enthusiasm in the generative AI sector has been surging, leading to a growing demand for AI-related infrastructure, including data centers and high-powered servers. The AI boom has benefited companies like Nvidia and other tech giants, and a successful CoreWeave IPO could encourage other AI startups to go public. Data center operator Switch, for instance, has been considering an IPO with an estimated valuation of $40 billion, including debt, Reuters news report said.
Founded in 2017, CoreWeave specializes in providing access to data centers and high-powered chips designed for AI workloads, primarily utilizing Nvidia’s technology. It operates in direct competition with cloud service providers like Microsoft Azure and Amazon Web Services. CoreWeave has attracted major tech clients, including Meta, IBM, and Microsoft. The company is aiming for a valuation exceeding $35 billion in its IPO, reinforcing its status as one of the most valuable AI startups.
In its March IPO filing, CoreWeave reported a surge in revenue, reaching $1.92 billion in 2024, a sharp rise from $228.9 million in 2023. However, the company’s net loss also widened significantly, increasing from $593.7 million in 2023 to $863.4 million in 2024. Notably, around two-thirds of CoreWeave’s revenue came from Microsoft, making it the company’s largest customer.
CoreWeave has successfully raised over $14.5 billion in debt and equity through 12 financing rounds, reflecting strong investor confidence. In one of the biggest private debt financing rounds in history, the company secured more than $7 billion last year, with asset managers Blackstone and Magnetar leading the investment.
InfotechLead.com News Desk
