According to a report by the overseas technology media The Information this Tuesday, the AI cloud platform CoreWeave, supported by NVIDIA, has secretly submitted its IPO prospectus this week, and the company is expected to go public officially in April next year. The company has hired Morgan Stanley, Goldman Sachs, and JPMorgan to handle the IPO matters.

CoreWeave, headquartered in New Jersey, was founded in 2017 as a cryptocurrency mining company and later ventured into the Cloud Computing services sector. The company's investors include NVIDIA, hedge fund Magnetar Capital, Blackstone, and Coatue.

As a new competitor to the Cloud Computing giant Amazon, CoreWeave rents out computer Servers equipped with AI Chips to AI application developers. When NVIDIA invested 0.1 billion dollars in CoreWeave at the beginning of 2023, the company's valuation was only 20 dollars. But in the latest round of financing, this figure has soared to 23 billion dollars.

Deutsche Bank Analyst David Folkerts-Landau commented:

The potential IPO of CoreWeave is as eye-catching as an oasis in the desert.

Over the past two years, the IPO channel in the USA has basically dried up, and technology IPOs have been few and far between. CoreWeave's IPO next year may end this drought.

Income is highly dependent on Microsoft.

Microsoft is currently the largest customer of CoreWeave. Due to the capacity limitations of the company's Datacenter, Microsoft has turned to CoreWeave as its AI infrastructure provider to meet OpenAI's computing needs.

In terms of revenue, CoreWeave expects to generate approximately 2 billion USD in revenue in 2024, with revenue set to quadruple to 8 billion USD in 2025. The company also stated that it will achieve positive Net income in the near future.

Regarding Datacenter, CoreWeave aims to establish its AI infrastructure in 20 Datacenters by the end of this year, including its own Datacenter as well as those operated by companies such as Equinix and Digital Realty.

NVIDIA diversifies risk.

CoreWeave's success helps NVIDIA reduce its operational risks.

NVIDIA's largest AI Chip customers currently are Amazon, Microsoft, and Alphabet, Google's parent company. However, Amazon and Google have already developed their own AI accelerator chips aimed at reducing dependency on NVIDIA.

External analysts believe that second-tier cloud GPU providers like CoreWeave will allow NVIDIA to better control the deployment of its GPUs in the market, thereby reducing risks from large customers.

How far can the "GPU scalper" model go?

However, CoreWeave's success is not without risks. The company's success is highly dependent on the scarcity of NVIDIA AI Chips.

In the past 12 months, CoreWeave has raised over $10 billion in debt financing from lenders such as Blackstone and hedge fund Magnetar Capital, with the debt secured against the NVIDIA GPU inventory that the company holds, and the raised funds are used to purchase more chips. This massive financing also means that CoreWeave has a very high level of leverage.

But with improvements in the AI Chip supply chain, the prices of the NVIDIA GPUs held by CoreWeave have also decreased. Some investors are concerned that as new advanced GPU versions are released or the current high spending by technology giants on AI begins to shrink, the ongoing value of these 'loan-secured' chips will be called into question, and CoreWeave's 'GPU scalping' operation model may be coming to an end.