CoreWeave IPO: Nvidia-backed AI startup valued at $23 billion in muted Nasdaq listing; How does this fare for US IPOs?

CoreWeave IPO: CoreWeave's shares closed flat after opening nearly three per cent below their offer price in its Nasdaq debut on Friday, March 28, giving the Nvidia-backed artificial intelligence (AI) infrastructure firm a valuation of $23 billion on a fully diluted basis. CoreWeave had taken a hit when it downsized its initial public offering (IPO). The stock opened at $39, compared with the IPO price of $40.

According to news agency Reuters, AI chip giant Nvidia contributed a $250-million order as part of CoreWeave's IPO, which raised $1.5 billion. Despite the downsize, the IPO was the world's largest AI-related listing by amount raised according to Dealogic, which has compiled data as far back as 1995.

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CoreWeave IPO: How does the Nasdaq debut fare for US IPOs?

The lackluster performance could crush hopes of a meaningful recovery in IPOs, especially when equity markets are grappling with tariff-related turmoil. Wall Street stocks closed sharply lower on Friday, with the tech-heavy Nasdaq falling 2.7 per cent.

It could also dampen sentiment towards AI infrastructure amid rising uncertainty over Big Tech's massive spending spree and fears of competition from lower-cost options such as China's AI startup DeepSeek, which require fewer chips.

Investors have previously driven AI-related companies such as Oracle and Microsoft to lofty valuations. Yet, both companies, which markets may view as comparables to CoreWeave, have fallen 13 per cent and seven per cent this year, respectively.

CoreWeave sparked worries among risk-averse investors during its roadshow as they weighed its long-term growth prospects, financial risks and capital intensity in a volatile market. "The infrastructure that you need to build and deliver AI is one of the true super cycles that exist," CoreWeave CEO Mike Intrator told Reuters. “Working with the clients who are building the infrastructure that will drive AI, there has been no reduction in demand.”

Also Read: DeepSeek under review: US Congress blocks use of Chinese AI for employees amid data security fears

CoreWeave IPO details

Livingston, New Jersey-based CoreWeave provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77 per cent of CoreWeave's revenue last year came from just its top two customers, including Microsoft.

"The OpenAI contract... materially decreases the single client concentration, and we'll continue to do that over the next several years," Intrator told Reuters when asked about these concerns. CoreWeave signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, Reuters first reported earlier this month, forging ties with the most prominent startup in the industry.

Also Read: CoreWeave IPO: Nvidia-backed AI startup to raise $2.5 billion via public issue, asks investors to pay $47-$55/share

The company's executives said their contracts with Microsoft haven't changed and they haven't seen any commitments canceled or withdrawn by the cloud giant. Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after "The Merge", Ethereum's 2022 upgrade, slashed rewards for miners.

CoreWeave's revenue has grown at breakneck speed, climbing more than eight-fold last year. The company had around $8 billion in debt as of last year. It said earlier this month that it plans to use about $1 billion of the IPO proceeds to repay debt.

It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, JPMorgan and Goldman Sachs.