CoreWeave Faces Uncertainty Amid AI Boom as IPO Falls Short

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CoreWeave’s Shaky IPO: Struggling with Declining GPU Demand and Heavy Debt

 CoreWeave, a company that once thrived by supplying GPUs for the cryptocurrency and AI industries, has had a rocky start since going public. Initially hoping to sell shares for $47 to $55 each, the stock opened at just $39, even after receiving a significant $250 million investment from Nvidia. The company’s fundamentals raise several red flags, leading to a less than enthusiastic reception from investors.



Founded in 2017, CoreWeave pivoted to AI after initially serving the cryptocurrency mining market. However, its reliance on GPUs as a key business model is now under threat as the demand for these chips wanes. One of the company’s biggest clients, Microsoft, has significantly scaled back its AI infrastructure spending, and with GPU supply issues easing, the demand for the hardware that CoreWeave depends on is cooling.

In 2024, Microsoft made up a massive 62% of CoreWeave’s revenue, but it has since pulled back from future infrastructure investments. This places the company in a precarious position, as it is heavily reliant on just two backers—Microsoft and Nvidia—both of which are scaling back their AI investments.

Moreover, CoreWeave is struggling with a substantial debt load. Despite bringing in $1.9 billion in revenue in 2024, the company posted losses of $6 billion last year and $1.1 billion the year before. It has been borrowing heavily, using its GPUs as collateral, which is becoming increasingly risky as GPU prices drop.



CoreWeave’s IPO raised $1.46 billion, but concerns persist about its sustainability in the face of shifting market conditions. The company’s stock performance may also serve as an indicator for other AI companies hoping to go public, as investor demand for AI-related shares has been tepid.

With ongoing price reductions in chip hardware and big tech companies increasingly building their own AI infrastructures, CoreWeave’s future remains uncertain. If the much-hyped AI revolution fails to meet expectations, CoreWeave’s reliance on outdated models could spell trouble for its long-term viability.

Despite the challenges, CoreWeave’s founders have already cashed out $500 million between 2023 and 2024, securing their financial futures regardless of how the company performs in the market.


CoreWeave Faces Uncertainty Amid AI Boom as IPO Falls Short

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