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CoreWeave Slashes IPO Size and Price Amid Cooling Investor Enthusiasm for AI Infrastructure

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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.

SK Hynix Reports Early Orders Ahead of Potential US Tariffs

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South Korean memory chipmaker SK Hynix announced on Thursday that some customers have accelerated their orders in anticipation of potential US tariffs on semiconductors. Speaking at the company’s annual shareholder meeting, Lee Sang-rak, Head of Global Sales and Marketing, attributed recent favorable market conditions to this “pull-in” effect and reduced customer inventory levels. However, he cautioned that it remains uncertain whether this trend will continue.

In January, SK Hynix projected a 10%-20% drop in DRAM and NAND flash memory shipments for Q1 2024. However, demand from the AI sector has contributed to price increases by competitors such as Micron, SanDisk, and China’s YMTC. Reports suggest that fears of impending US semiconductor tariffs, potentially reaching 25%, have led to increased inventory transfers to the US.

Despite concerns about AI hardware spending, SK Hynix remains optimistic about explosive growth in high bandwidth memory (HBM) chip demand, especially as a key supplier to Nvidia. CEO Kwak Noh-Jung confirmed that HBM sales for 2025 have already been fully booked, with negotiations for 2026 volume expected to conclude in the first half of this year.

TSMC Fourth-Quarter Profit Expected to Jump 58% Due to AI Chip Demand Surge

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading producer of advanced chips for artificial intelligence (AI) applications, is set to report a 58% increase in fourth-quarter profit, driven by strong demand in the AI sector. The company, which counts Apple and Nvidia among its clients, is benefiting from the AI megatrend but faces challenges such as U.S. government technology restrictions on China and potential tariffs under President-elect Donald Trump’s administration.

Analysts estimate that TSMC will post a net profit of T$377.95 billion ($11.41 billion) for the quarter ending December 31, compared to T$238.7 billion in the same period the previous year. This projection follows TSMC’s recent revenue report, which exceeded market expectations. The company will release its revenue outlook in U.S. dollars during its quarterly earnings call on Thursday.

Arete Research analyst Brett Simpson believes TSMC’s growth in 2025 will continue to be driven by AI customers. He is optimistic that TSMC can establish a strong relationship with the incoming U.S. administration, especially given its $65 billion investment in three plants in Arizona. TSMC’s overseas expansion, however, is not expected to diminish its Taiwanese manufacturing base.

Fubon Financial’s Edward Chen noted that the company’s progress in Arizona, including chip yield rates, would be critical for its future performance. He also highlighted the uncertainty regarding how tariffs from the Trump administration may impact demand.

TSMC is expected to provide updates on its current quarter and full-year outlook during its earnings call, including capital expenditure plans. The company has already projected capital expenditure for 2024 to be slightly over $30 billion and indicated that 2025’s capital spending could surpass 2024 levels.

The AI boom has driven up TSMC’s stock, with the company’s shares soaring 81% last year, significantly outperforming the broader market’s 28.5% gain.