CoreWeave, the cloud services startup backed by Nvidia, is finding that financial-market reality can be a lot harsher than the theoretical data its AI-powered systems analyze, train and deploy.
Hyped as the hottest IPO of the year, the Livingston, N.J., group, which began its commercial life as a bitcoin miner in 2017, was originally looking to raise around $4 billion from a Nasdaq listing that would value it at around $35 billion.
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Reports now suggest it's preparing to slash those ambitions to around $1.5 billion and $23 billion respectively, with Nvidia (NVDA) stepping in at the 11th hour in the form of a $250 million stock order ahead of its Friday debut.
CoreWeave, which provides clients with cloud-computing resources powered by a large inventory of Nvidia chips, had been looking to capitalize on the AI investment wave and its close proximity to the market leader's key technologies. CoreWeave touted a massive sevenfold revenue increase in its pre-IPO update this month.
But concerns emerged as investors looked more closely at its business model -- which at present relies on just two customers for 77% of its revenue -- and also pegged the amount of capital spending the company would need to keep pace with Nvidia's two-year GPU lifecycle.
London's Financial Times in fact said earlier this week that Microsoft (MSFT) , which provides CoreWeave with around two-thirds of its revenue, had walked away from some of its commitments amid delivery and deadline issues.
And while the company pushed back hard on the report, calling it "false and misleading," several analyst have written about Microsoft scaling back its own data-center-investment plans and rationalizing its capital-spending aims for the coming year.
Related: Analysts revisit Nvidia stock price targets after surprise demand forecast
Amazon (AMZN) , Microsoft's larger cloud-computing rival, also appeared to trim at least some of its near-term spending plans when it updated investors last month. Amazon suggested an annual pace over 2025 that's largely in line with the $26.3 billion it spent over fourth-quarter 2024.
CoreWeave's capital spending, of course, can't be funded by current revenue, even with the addition of OpenAI as a third major client earlier this month. The group has amassed a $12 billion debt pile that could grow to around $21 billion by year-end.