AI Cloud Startup CoreWeave Raises $1.1B as GPU Demand Surges

AI cloud provider CoreWeave has raised $1.1 billion in a funding round led by Coatue and including Nvidia and other major industry players. CoreWeave rents out graphics processing units (GPUs), a critical component of generative AI and related technology. The new capital escalates CoreWeave’s valuation from $7 billion to $19 billion, reflecting skyrocketing demand for GPUs.

CoreWeave Cloud

GPUs are at the heart of the cloud infrastructure supporting generative AI projects. The ascent of CoreWeave is indicative of the need for GPUs in generative AI. CoreWeave currently operates three U.S. data center infrastructure regions and 14 data centers. The startup is working on adding another 25 data centers by 2025. Nvidia is both a supplier and an investor, which makes sense since it is by far the biggest provider of GPU hardware, though it can’t come close to meeting the demand for its products. CoreWeave has been working with Nvidia for a while, including participating in the $1.3 billion funding round for Inflection AI before Microsoft informally absorbed most of it.

“CoreWeave continues to push forward as a provider of critical infrastructure in the development of AI, and the high caliber of investors who continue putting their trust in us validates the enormous opportunity we have to define the next generation of cloud computing,” Coreweave CEO Mike Intrator explained. “CoreWeave is designed specifically to tackle the most complex and pressing challenges in high performance compute. With this new round, we will continue investing in and working with the largest AI enterprises in the world.”

CoreWeave’s ambitious growth plans set it on a collision course with industry titans such as Amazon and Google, which boast extensive and globally distributed data center networks. However, CoreWeave has some notable clients like Microsoft and Mistral AI that, along with the massive cash infusion, should help it stay competitive. The newest investment follows the close of a combined $1.62 billion round in December, a $420 million primary round in April led by Magnetar, and $642 million in a secondary investment. CoreWeave was also part of The rapid valuation increase and aggressive expansion plans of CoreWeave reflect a significant confidence boost from investors, driven by the startup’s potential to carve out a substantial niche in the high-demand, fast-evolving realm of generative AI technologies and cloud computing services.

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