Shares of CoreWeave, an AI cloud provider, began trading on Friday following a highly anticipated IPO, which is viewed as an important indicator for other AI companies considering going public. Originally established as a cryptocurrency mining company, CoreWeave transitioned to renting its Nvidia graphic processing units to firms needing to train AI. Based in New Jersey, the company is the first tech listing of the year. However, its debut comes amid some controversy. While CoreWeave’s revenue has increased by over 700% year-over-year, two customers account for 77% of this growth, and the company has cautioned about “material weaknesses” in internal financial reporting.
The company’s shares opened at $39, briefly reaching $41.79 earlier in the day, after being priced at $40 in the IPO. Founded by Michael Intrator, Brannin McBee, and Brian Venturo, CoreWeave now holds a market capitalization of approximately $19.44 billion. The stock closed just under $40.
Michael Intrator, the CEO of CoreWeave, highlighted the company’s unique positioning in the market during an interview. According to Intrator, the company differentiates itself through three main strategies: developing a sophisticated technical solution for parallelized cloud computing, optimizing the availability and utility of compute through understanding power markets and data management, and leveraging financial markets to access the capital necessary for large-scale operations.
Intrator justified the decision to go public now as a strategic move to effectively access debt markets, which in turn would lower the cost structure of operations. This transition to public status is intended to create a loyal syndicate of buyers committed to the company’s long-term mission. He acknowledged resizing the IPO offering in light of prevailing market conditions but emphasized that the timing was right to launch into the public sphere.
Addressing the concentration of revenue from major clients, Intrator acknowledged that initial contracts like the one with OpenAI could result in a high concentration of revenue from those deals. However, he expressed confidence in diversifying the client base over time. Responding to market concerns about potential oversupply in data centers, Intrator noted there is still rampant demand requiring more and larger compute capabilities.
Regarding media perceptions and speculative concerns, Intrator maintained a focus on executing the company’s strategy, confident in delivering long-term value. When questioned about the company’s origins in crypto mining, Intrator indicated that the business is now fully focused on AI and cloud computing. Although the stock opened slightly below the IPO price, Intrator downplayed concerns, emphasizing the company’s preparation and potential to drive shareholder value.
This article was initially published on Fortune.com.
