Artificial intelligence startup CoreWeave raises $7.5 billion in debt, Blackstone reports

Fresh off a $1.1 billion equity funding round, AI infrastructure startup CoreWeave raised $7.5 billion in debt to invest more heavily in its cloud data centers.

Blackstone funds led the lending round with participation from Coatue, Carlyle, Black stone, Magnetar, etc. In its equity financing two weeks ago, CoreWeave was valued at $19 billion.

Investors are flocking to CoreWeave because the 550-person company is one of the main providers of of Nvidia chips to work with AI models. Demand for the technology is growing as businesses in nearly all sectors race to integrate AI chatbots into their products following the launch of OpenAI’s ChatGPT in late 2022.

With Nvidia’s AI-focused GPUs in limited supply, CoreWeave’s access to processors has made it a hot commodity. This means Nvidia-backed CoreWeave is up against the world’s top cloud infrastructure operators, including Amazon and Google.

On its website, CoreWeave claims to have lower on-demand pricing than any major cloud company. Even Microsoftthe world’s second-largest cloud infrastructure provider, has come to rely on CoreWeave to help supply OpenAI with the computing power it needs.

Colette Kress, Nvidia’s chief financial officer, said at a Citigroup event in September that CoreWeave has “quite a lot of skill in terms of just their speed of adoption, their speed in terms of setting things up.”

A spokesman for CoreWeave declined to comment on whether the company is using Nvidia GPUs as collateral for the new debt financing. Such GPUs were used as collateral in $2.3 billion of debt last year, Reuters reported.

The new debt will help CoreWeave pay for GPU-loaded servers as well as networking equipment and cabinets, the spokesperson said.

Correction: An earlier version of this article misspelled Colette Kress’s name.