Weeks after IPO, CoreWeave reportedly seeking $1.5B in debt financing – News

Following its lukewarm initial public offering in late March, CoreWeave Inc. is reportedly seeking to raise $1.5 billion in debt financing.

Bloomberg today cited a source as saying that JPMorgan Chase & Co. is expected to lead the transaction. CoreWeave, which operates a cloud platform optimized for artificial intelligence workloads, reportedly hopes to raise the financing through high-yield bonds. Those are loans that provide high yields to lenders because they’re considered to have an elevated risk of default.

CoreWeave launched in 2017 with an initial focus on mining cryptocurrency using graphics processing units. About two years later, the company started repurposing its GPU clusters to run AI workloads. Today, it operates a network of 32 AI-optimized data centers equipped with about a quarter-million graphics cards.

The company took on a significant amount of debt to build out its AI infrastructure. According to the Financial Times, CoreWeave has borrowed $12.9 billion alone in the past two years and had $8 billion worth of loans on its balance sheet at the end of 2024. Those liabilities are expected to incur $7.5 billion in interest payments through the end of 2026. It’s believed CoreWeave may seek to refinance some of its loans with the new debt raise currently in the works.

The reported fundraising push comes less than three months after the company floated on the Nasdaq. CoreWeave sold 37.5 million shares for $1.5 billion, significantly less than the $2.7 billion it had originally sought. The company’s shares opened below their IPO price, dropped 7% in their second day of trading and jumped more than 40% the next day.

CoreWeave notched another big one-day jump this month after Microsoft Corp. reported its third-quarter earnings. The tech giant, which accounts for about two-thirds of CoreWeave’s revenue, reaffirmed plans to increase capital expenditures in the next fiscal year. Microsoft earlier announced plans to invest $80 billion in new data center capacity.

CoreWeave also counts Meta Platforms Inc., OpenAI and Cohere Inc. as customers. After Microsoft declined a $12 billion option to extend its data center deal with the cloud provider, OpenAI reportedly bought the contract.

At the time of its IPO filing, CoreWeave stated that its data centers use more than 360 megawatts of power. One megawatt corresponds to the electricity consumption of several hundred households. The company has inked contracts for 1.3 gigawatts of power that it plans to use in the coming years to expand its data center network.

To drive demand for its data center capacity, CoreWeave intends to make more software products available to cloud customers. It acquired AI development tooling provider Weights & Biases Inc. shortly before going public in a deal reportedly valued at $1.4 billion. As part of its growth push, CoreWeave also plans to increase its focus on international markets and regulated industries. 

Photo: CoreWeave