"CoreWeave's IPO in March was the largest of any tech start-up since 2021, and the company's share price has subsequently more than doubled, outperforming even the "Magnificent Seven" tech stocks. On Wall Street, CoreWeave is regularly referred to as one of the most important companies powering the AI revolution. In the past few months, it has announced a $22 billion partnership with OpenAI, a $14 billion deal with Meta, and a $6 billion arrangement with Nvidia."
"The company expects to bring in $5 billion in revenue this year while spending roughly $20 billion. To cover that gap, the company has taken on $14 billion in debt, more than half of which comes due in the next year. Many of these loans were issued by private-equity firms at high interest rates, and several use complex forms of financial engineering, such as giving the money to newly formed legal entities created for the explicit purpose of borrowing on CoreWeave's behalf."
CoreWeave operates large GPU-heavy data centers, buying high-end chips and leasing computing capacity to AI companies that avoid upfront infrastructure costs. The company completed a major IPO and secured multibillion-dollar deals with OpenAI, Meta, Nvidia, and Microsoft, becoming central to AI compute supply. Revenue projections for the year are about $5 billion while planned spending approaches $20 billion, financed by roughly $14 billion of debt and extensive future lease obligations exceeding $34 billion through 2028. Much of the borrowing carries high interest, complex legal structures, and near-term maturities, creating concentrated counterparty and refinancing risks that could cascade through the AI ecosystem.
Read at The Atlantic
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