Nvidia-Backed AI Firm CoreWeave Secures $7.5B In Debt Financing: Report

Zinger Key Points
  • CoreWeave raises $7.5 billion in debt financing from investors including Blackstone, Carlyle Group and BlackRock.
  • Funds to support data center expansion and AI chip purchases.

CoreWeave, a prominent AI cloud-computing startup backed by Nvidia Corp NVDA, has reportedly secured $7.5 billion in debt financing from major investors, including Blackstone Inc BXCarlyle Group Inc CG, and BlackRock Inc BLK.

This marks one of the largest private debt deals ever. Last year, CoreWeave also raised $2.3 billion through a debt deal, according to a report from the Wall Street Journal.

This financing round follows a recent $1.1 billion equity funding, which valued the New Jersey-based company at $19 billion.

CoreWeave is at the forefront of the AI surge, leasing Nvidia AI chips essential for developing systems like OpenAI’s ChatGPT. 

Operating in 14 data centers as of last year, the company plans to double its capacity to 28 data centers by the end of this year.

CEO Michael Intrator stated that the new funds will support this expansion, including the purchase of AI chips, servers, and networking equipment. 

“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,” Intrator commented, predicting the $7.5 billion will be fully committed this year, with plans for additional financing to follow.

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The substantial funding highlights investor interest in AI-centric businesses and the longevity of the AI boom, which gained significant momentum after ChatGPT’s launch. 

CoreWeave, like several new AI cloud-computing firms, provides early access to advanced AI chips, distinguishing itself in the AI computing market.

The largest cloud-computing firms like Microsoft Corp MSFTAmazon.com Inc AMZN, and Alphabet Inc’s GOOGL Google offer broad services. 

The report quoted the company’s Co-founder Brannin McBee, who remarked, “I don’t think anyone would have expected another hyperscaler was going to come into the market this quickly.”

Historically U.S.-focused, CoreWeave recently expanded to London and plans to open two more data centers in the U.K. this year, with further expansions in 2025. 

Nvidia, which participated in a previous CoreWeave funding round, underscores the startup’s capability to implement its plans effectively. 

With Nvidia dominating the AI chip market, CoreWeave’s success heavily relies on securing these crucial components amid supply constraints.

The debt financing was led by Blackstone and included contributions from Magnetar Capital, Coatue Management, Carlyle Group, CDPQ, DigitalBridge, BlackRock, Eldridge Industries, and Great Elm Capital. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Photo via Gerd Altmann from Pixabay

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