TLDR
- In their pursuit of going public, CoreWeave—an ex-crypto mining company now focused on AI—has teamed up with heavyweights Morgan Stanley, Goldman Sachs, and JPMorgan to handle their IPO, targeting a valuation of $35 billion.
- In 2024, CoreWeave saw its revenue balloon to $1.9 billion, marking an impressive 737% growth from the previous year. However, they also faced a net loss of $863.4 million.
- Examining their recent quarterly figures, the company achieved revenues of $747.4 million alongside a gross margin of 76%, resulting in an operating income of $112.7 million.
- The company boasts $15.1 billion in contracts yet to be fulfilled, though there's concern over the potential oversupply of GPUs in the market.
- Founded in 2017 under the name Atlantic Crypto, CoreWeave shifted its focus from Ethereum mining to carving a niche in AI infrastructure by 2019.
Evolving from a focus on cryptocurrency mining, CoreWeave now stands as a formidable AI infrastructure provider, recently submitting an IPO filing with hopes of reaching a $35 billion valuation. Their IPO intentions were formalized with the S-1 registration filing submitted to the SEC on Monday.
Morgan Stanley, Goldman Sachs, and JPMorgan lead the underwriter team for CoreWeave’s public offering. This event marks a significant development for the New Jersey-based firm, originating from its initial ventures in crypto.
Details from the filing expose CoreWeave's strong growth trajectory. Revenue for 2024 reached an impressive $1.9 billion, showcasing a 737% surge from 2023.
Recent quarterly reports highlight solid performance, with CoreWeave reporting $747.4 million in revenue, a gross margin of 76%, and operating income of $112.7 million.
Nonetheless, there's turbulence ahead, as the company cites a substantial $863.4 million net loss, mainly because of heavy investments in infrastructure and interest costs tied to nearly $8 billion in liabilities.
Looking forward, CoreWeave's revenue appears promising, with $15.1 billion in pending contracts signaling reassuring growth prospects.
The Pivot
The origins of CoreWeave trace back to 2017 when former commodities traders Michael Intrator, Brian Venturo, and Brannin McBee launched the firm under the Atlantic Crypto banner.
Initially focused on Ethereum production, the founders made a bold strategic move in 2019 by pioneering into AI infrastructure.
This pivot to AI coincided with the surge in demand triggered by OpenAI's ChatGPT debut in 2022, positioning CoreWeave to leverage the industry's expansion.
Company leadership is quite centralized, as CEO Michael Intrator commands roughly 38% of the voting rights, according to the filing.
Despite its advancements, there are skeptical voices. Industry expert Jeffrey Emanuel, CEO of Pastel Network, cited potential GPU supply issues as a risk factor.
CoreWeave has refrained from addressing public consternations. The company opted out of commenting on the GPU market's surplus scenario.
CoreWeave's IPO filing underscores their competitive strategy within the market. CEO Intrator pointed out the limitations and cost concerns associated with traditional cloud providers in a 2021 blog post.
Transitioning from cryptocurrency mining to robust AI infrastructure was a pivotal shift, enabling CoreWeave to tap into the rising tide of AI computing demand.
CoreWeave is making its public market debut amidst a growing fascination with AI technologies, seeking to seize the opportunity amid this enthusiasm.
