CoreWeave, a cloud computing company aiming to be the first major artificial intelligence start-up to go public, has faced setbacks as it significantly reduced the size and value of its offering ahead of its public listing. Originally expected to raise $4 billion at a $35 billion valuation, the company is now seeking to raise $1.5 billion at a $19 billion valuation.
The reduction in offering size is seen as a reflection of the current uncertainty in the stock market due to concerns around inflation and tariffs. Additionally, stock in Nvidia, an investor and supplier for CoreWeave, has fallen 7 percent since Wednesday.
Although CoreWeave will be the first major A.I. company to go public, it may not be a true guide for A.I. offerings, as other industry start-up leaders like OpenAI and Anthropic will play a bigger role in shaping the sector. CoreWeave’s unique background as a former cryptocurrency mining firm and its high debt load make it a challenging I.P.O. candidate.
The company, which saw its revenue increase from $229 million to $1.9 billion last year, has yet to turn a profit. Despite this, it has garnered partnerships with companies like Nvidia and OpenAI. CoreWeave’s founders still hold a significant stake in the company, with hedge fund Magnetar being its largest investor.
Morgan Stanley, JPMorgan, and Goldman Sachs are managing CoreWeave’s I.P.O., which will provide insight into the profitability of cloud computing and the A.I. industry. As the company prepares to go public, the market will be watching to see how it performs in the face of current economic uncertainties.
Note: The image is for illustrative purposes only and is not the original image of the presented article.
