CoreWeave Secures $650 Million Investment

By Krystal Hu
(Reuters) – AI cloud startup CoreWeave announced on Wednesday the closure of a $650 million minority investment led by Jane Street, Magnetar, Fidelity Management, and Macquarie Capital as investors aim to leverage the generative AI boom.

The secondary sale, involving existing shareholders selling their stakes to new investors, valued CoreWeave at $23 billion, according to sources familiar with the matter.

In May, the company's valuation stood at $19 billion following a $1.1 billion Series C investment led by Coatue, a source had previously indicated.

The demand for cloud computing services, like those offered by specialized companies like CoreWeave, has surged since the launch of OpenAI's ChatGPT in late 2022, with businesses keen to develop their own generative AI applications.

CoreWeave leverages expensive and limited AI chips, including those from backer and AI leader Nvidia. The company faces competition from major cloud service providers such as Microsoft's Azure and Amazon's AWS.

The funding round saw further participation from Cisco Investments, Pure Storage, BlackRock, Coatue, Neuberger Berman, and others, as stated by the company.

CoreWeave enlisted Morgan Stanley and Goldman Sachs to assist with this transaction.

Funding for AI and cloud companies across the U.S., Europe, and Israel is on the rise following three years of decline, with projections estimating a total of $79.2 billion by the end of the year, according to venture capital firm Accel.

Meanwhile, OpenAI recently closed a $6.6 billion funding round in October, reaching a valuation of $157 billion.