Once again, the AI boom has suddenly made a company we’ve never heard of very important.
What happened: AI cloud company CoreWeave launched its IPO Friday, listing on the Nasdaq. The day before, it slashed its share price below the projected range and brought Nvidia on as an anchor investor. More trouble struck when its shares dipped upon opening.
- Stocks opened at US$39 a share, down from its IPO listing price of $40 a share.
Catch-up: Founded in 2017 as a crypto miner, CoreWeave pivoted to using its data centres and arsenal of Nvidia GPUs to provide computing power for AI companies. It netted $1.9 billion in revenue last year, and scored big cash from Microsoft and OpenAI this year.
Why it matters: Spurred by the recent AI boom, CoreWeave is the first company focused entirely on AI to go public. While some projected that it could help revive the U.S. IPO market, the rocky debut throws this into question — and casts a shadow over broader investor interest in AI infrastructure companies.
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DeepSeek proved earlier that training powerful AI models didn’t require as much computing power as once thought, making services like CoreWeave’s less vital.
- Case in point: Microsoft has abandoned cloud storage projects in the U.S. and Europe due to overcapacity in the past six months and has ditched some CoreWeave contracts.
Zoom out: CoreWeave also has some alarming company-specific issues. In pre-IPO filings, it disclosed $8 billion worth of debt. And though its stock of 250,000 Nvidia GPUs is an impressive asset right now, its value could fade in the future as more advanced chips are released.—QH