"Son of Nvidia" CoreWeave submits IPO application, with revenue soaring 8 times last year and capital expenditure increasing 3 times, Microsoft contributing 2/3 of revenue

On March 3rd local time, AI cloud computing company CoreWeave submitted an IPO application to the U.S. Securities and Exchange Commission (SEC), with an expected company valuation of over $35 billion and plans to raise approximately $4 billion.

In 2024, CoreWeave's revenue reached $1.9 billion, eight times that of the previous year, while capital expenditures during the same period nearly tripled to over $8.5 billion, with a net loss of $863 million. In 2023, the revenue was only $229 million, with a net loss of $594 million.

Additionally, in the risk disclosure section of the IPO application documents, CoreWeave acknowledged significant deficiencies in its internal controls over financial reporting, including inadequate application controls in IT systems supporting financial reporting and a lack of qualified personnel in related positions.

According to the documents, the company's co-founder and CEO Michael Intrator holds 2.4% of Class A shares and nearly half of Class B shares, giving him 38% voting power. Hedge fund Magnetar Capital holds 7.2% voting power, while NVIDIA holds 1.2% voting power.

According to the documents, approximately 77% of CoreWeave's revenue in 2024 comes from its top two customers, with Microsoft contributing nearly two-thirds of total sales. Investors are discussing how long CoreWeave's growth can be sustained, especially if major clients like Microsoft and Meta reduce their reliance on external cloud service providers, which could impact CoreWeave.

Microsoft CEO Satya Nadella stated in a podcast last December that Microsoft's contract with CoreWeave was merely a "one-time deal," made to urgently acquire sufficient data center resources.

Currently, CoreWeave has signed about six GPU server leasing agreements with Microsoft, with these contracts set to expire no later than 2029. If Microsoft does not renew, CoreWeave will need to find other clients to lease these GPUs, or it will face business risks.

CoreWeave: "NVIDIA's Favorite Child"

Headquartered in New Jersey, CoreWeave was founded in 2017, initially as a cryptocurrency mining company, and later ventured into the cloud computing services sector.

It is worth mentioning that NVIDIA's preference for CoreWeave has reached a level of "treating it as its own." To what extent - After receiving investment from NVIDIA, CoreWeave has become a direct cloud computing power supplier for NVIDIA, and even Microsoft has to order cloud computing power from them.

In June of this year, Microsoft signed a contract worth $1.6 billion with CoreWeave, primarily because Microsoft itself cannot obtain enough GPUs from NVIDIA.

Analysis believes, CoreWeave's success helps NVIDIA diversify its operational risks and effectively counterbalance potential competitors in the chip industry - Amazon and Google.

Currently, NVIDIA's largest AI chip customers are Amazon, Microsoft, and Google's parent company Alphabet. However, Amazon and Google have already developed their own AI accelerator chips to reduce reliance on NVIDIA. Moreover, secondary cloud GPU providers like CoreWeave will facilitate NVIDIA in better controlling the deployment of its GPUs in the market, thereby reducing risks from major customers.