CoreWeave raises $7.5 billion in debt for AI computing push

livemint.com:

CoreWeave, an artificial-intelligence cloud-computing startup backed by Nvidia, has raised $7.5 billion from investors including Blackstone, Carlyle Group and BlackRock in one of the largest-ever private debt financings. The new debt financing follows a $1.1 billion equity funding round two weeks ago that valued the fast-growing company at $19 billion.

Last year CoreWeave did another debt financing deal worth $2.3 billion. New Jersey-based CoreWeave sits near the red-hot center of the AI boom, leasing out access to AI chips from Nvidia that are essential to creating AI systems such as OpenAI’s ChatGPT.

The company operated in 14 data centers at the end of last year and plans to double its footprint to 28 data centers by the end of this year. Much of the new funding will go toward that effort, including purchases of AI chips and associated infrastructure such as servers and networking equipment, Chief Executive Michael Intrator said.

“It is a monumental financing in nominal terms, but it’s also a monumental financing in terms of the extent to which it drives the company forward," he said, adding that he expected the $7.5 billion to be committed this year, after which the company would be back for another facility. The funding underlines strong investor interest in businesses exposed to the AI boom, as well as the staying power of that boom more than a year after ChatGPT captured the public’s imagination and led to a flood of investment in AI companies and in Nvidia.

CoreWeave is one of a number of AI cloud-computing companies that have sprung up in the past few years, offering customers early access to the most advanced AI chips and focusing on the AI computing niche. The biggest cloud-computing companies in the