CoreWeave, a prominent AI cloud services provider backed by Nvidia, has significantly downsized its U.S. initial public offering (IPO), reducing the number of shares offered and pricing them well below expectations. The move reflects growing investor caution surrounding capital-intensive AI infrastructure businesses, despite ongoing interest in the sector.
Originally planning to offer 49 million shares priced between $47 and $55, CoreWeave will now sell 37.5 million shares at $40 each—a 23.5% reduction in volume and a steep price cut. This revised offering is expected to raise around $1.5 billion, valuing the company at approximately $23 billion on a fully diluted basis, down from an earlier estimated $32 billion.
. Nvidia Steps In, but Market Confidence Wavers
Nvidia, CoreWeave’s most important backer and supplier, will anchor the IPO with a $250 million order at the revised price. CoreWeave has deployed over 250,000 Nvidia GPUs to power AI workloads, making it one of the largest GPU consumers globally.
Despite this strong strategic relationship, CoreWeave’s IPO roadshow reportedly met with lukewarm interest from risk-averse investors. Concerns over its long-term growth, capital intensity, and heavy reliance on key partners like Microsoft and OpenAI contributed to the subdued reception.
. Debt, Lease Model, and Profitability Risks in Focus
CoreWeave carries approximately $8 billion in debt and leases all of its 32 data centers—an approach that adds $2.6 billion in operating lease liabilities. About $1 billion from the IPO will be used to reduce this debt, though the company confirmed it will continue to borrow. Its inability to generate profits has added to investor hesitation.
While CoreWeave has secured major partnerships, including an $11.9 billion infrastructure deal with OpenAI and a $350 million share issuance to the same firm, questions about its sustainability in an increasingly competitive environment remain.
. AI Enthusiasm Meets Market Realities
The company’s subdued debut is viewed as a potential bellwether for the AI infrastructure sector, where rising costs and uneven demand across data center operators are starting to draw scrutiny. Analysts like IPOX’s Lukas Muehlbauer see this as a sign that “investors are recalibrating AI infrastructure valuations,” rather than rejecting the model entirely.
In the broader IPO market, appetite for new listings appears cautious. Dealogic data shows U.S. equity capital market activity in Q1 2025 dropped both in volume (from 243 to 187 deals) and value (from $74 billion to $63.5 billion) compared to the same period last year.
. Looking Ahead
Although CoreWeave has yet to deliver profitability, its strategic positioning in the AI space and close ties with Nvidia and OpenAI keep it in the spotlight. Investors, however, are now demanding clearer paths to sustainable growth and stronger financial discipline from AI infrastructure players.
