CoreWeave Grows Data Center Footprint, Prepares For IPO After $10B Microsoft Deal

Artificial intelligence cloud startup CoreWeave is continuing to rapidly grow its data center footprint and bring in more money ahead of an expected initial public offering filing in December. 

CoreWeave, a cloud provider exclusively for the graphics processing unit computing needed for AI, has told investors it expects annual revenue to grow by around 300% next year to around $8B, The Information reports.

At the same time, the upstart hyperscaler has secured hundreds of millions of dollars in funding in just the past two months and ramped up its data center pipeline as it takes concrete steps toward launching an IPO next year. 

This anticipated earning surge comes in the wake of a major deal reported last week with Microsoft, which plans to spend $10B by the end of the decade to use CoreWeave’s data centers for AI training. The deal more than doubles the value of CoreWeave’s total constructed capacity and makes Microsoft by far its largest customer. This is despite the fact that Microsoft is also a CoreWeave competitor, offering its own GPU cloud products on its Azure platform. 

The Microsoft deal further cemented CoreWeave’s unique standing with investors, lenders and data center landlords compared to other large AI startups. Calling itself “The AI Hyperscaler,” the former cryptocurrency miner has emerged as the rare early-stage AI firm that prominent players are willing to make big bets on even as fears of an AI bubble persist.

Two of these major bets were placed at the beginning of October. Last month, reports emerged that Cisco Systems is planning a major investment in CoreWeave in a transaction that values the company at $23B.  Days earlier, CoreWeave announced it had closed a $650M credit facility led by JPMorgan, Goldman Sachs and Morgan Stanley.

CoreWeave has now raised more than $12.7B over the past 18 months, according to Bloomberg. Chipmaker Nvidia has invested more than $100M in the company, allowing CoreWeave to be first to market with some Nvidia products — a coveted position as the industry faces chip shortages amid the AI arms race. 

CoreWeave has leveraged this wave of investment into a rapidly expanding data center footprint and is accelerating the already frantic pace at which the firm is snapping up data center capacity. The company now plans to open 28 data centers globally by the end of the year, with 10 new facilities planned in 2025. By contrast, CoreWeave stated in August that it had opened nine data centers in 2024, with just 11 others in the works.

Some of this planned data center growth will come from a development joint venture between PowerHouse, Chirisa Technology Parks and Blue Owl Capital, which could eventually deploy as much as $5B to build AI data centers for CoreWeave. Announced in August, the JV’s first project will be a 120-megawatt data center on CTP’s campus near Richmond, Virginia, with further build-out expected in New Jersey, Pennsylvania, Texas, Kentucky and Nevada.

CoreWeave is the only company of its kind that could drive this scale of development from prominent industry players, insiders say. Data center providers and their financial backers, wary of an AI bubble and eager to avoid a repeat of the dot-com crash, have generally been unwilling to make deals with AI firms. Even large and well-capitalized early-stage AI companies must jump through hoops just to sign leases with major data center firms, some of whom cap the number of AI tenants in their facilities.

CoreWeave, however, is regarded as uniquely low risk compared to similar AI companies. The cost of capital for a deal involving CoreWeave can be as little as 175 basis points above a deal anchored by a hyperscaler like Microsoft, Amazon or Google, according to Primary Digital Infrastructure President Dave Ferdman.

Speaking at Bisnow’s DICE: South in August, Ferdman indicated that trust in “the tallest of the AIs” is only growing, and he predicted CoreWeave-linked debt will be priced similarly to hyperscalers in as little as 12 months. 

This is a widely shared opinion among data center developers and investors, who point to CoreWeave’s strong balance sheet, its unique relationship with Nvidia and the credit-grade tenants like Microsoft with long-term contracts driving the bulk of its business. 

“If you really peel back the envelope on CoreWeave, they're partially owned by Nvidia, and their two largest customers are two of the largest hyperscalers you'd want to do business with,” Carrington Brown, senior managing director for development at Affinius Capital, said at DICE: South.

“While the underlying credit for CoreWeave is not investment grade, people are looking at what their underlying contracts are,” Brown said. 

CoreWeave plans to capitalize on this credibility through an IPO, which is expected to be one of the largest such offerings next year. While the company first revealed it was considering an IPO in June, The Information reported this week that CoreWeave is planning its initial, confidential IPO filing — its first concrete step toward a public listing — before the end of December. According to Bloomberg, CoreWeave has selected Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. to lead its planned IPO.