CoreWeave’s $35B IPO to test AI infrastructure market amid economic headwinds

CoreWeave’s upcoming IPO represents a significant test for AI infrastructure companies entering the public markets amidst challenging economic conditions. As one of the first major AI infrastructure providers to attempt an IPO in recent years, CoreWeave’s performance will likely serve as a bellwether for investor confidence in artificial intelligence infrastructure as the sector matures. The company’s filing comes during a period of significantly depressed IPO activity and market volatility, making its ambitious valuation target particularly noteworthy.

The big picture: New Jersey-based cloud computing company CoreWeave is pushing forward with IPO plans despite market volatility, seeking a $35 billion valuation in what could become a pivotal moment for AI infrastructure companies.

• The company, which rents out GPUs and computing equipment to tech firms, filed with the SEC earlier this month and reportedly plans to list later in March 2025.
• CoreWeave’s move comes during a multi-year slump in tech IPOs, with major stock indexes recently declining on tariff and inflation concerns following President Trump’s return to office.

Customer concentration risks: CoreWeave faces significant exposure through its heavy reliance on a small number of major customers for revenue.

• Microsoft accounted for 62% of CoreWeave’s $1.9 billion revenue in 2024, creating substantial dependency on a single client.
• The Financial Times reported Microsoft recently reduced some commitments due to delivery issues, though CoreWeave disputed this claim.
• A new five-year, $11.9 billion contract with OpenAI could help diversify revenue, potentially exceeding CoreWeave’s entire 2024 revenue if distributed evenly over the contract period.

Market context: The tech IPO landscape has been challenging, but recent successful listings offer some promising signals.

• CoreWeave is reportedly seeking to raise $4 billion, placing it in the same league as chip designer Arm’s 2023 IPO that raised $4.87 billion.
• Arm’s stock has more than doubled since its IPO, while Reddit has seen its shares rise 250% since going public last year.
• Other AI-focused companies including Genesys, Databricks, and Cerebras have reportedly delayed their IPO plans due to market volatility and regulatory reviews.

Why this matters: CoreWeave’s IPO attempt represents an important test for the entire AI infrastructure sector and could set expectations for future AI-focused public offerings.

• As an “AI hyperscaler” providing critical infrastructure for AI development, CoreWeave’s market reception will indicate investor confidence in the companies building AI’s foundation.
• A successful listing could encourage other AI infrastructure companies to pursue public markets despite economic headwinds.
• The IPO market for AI companies remains nascent, with investors still awaiting potential future listings from model developers like OpenAI and Anthropic.

The counterpoint: Individual IPO performances can reflect company-specific factors rather than broader market sentiment about AI.

• Uber’s disappointing 2019 market debut occurred alongside successful IPOs from other tech companies like Zoom and Cloudflare.
• CoreWeave’s heavy customer concentration presents a specific risk factor that may influence its performance regardless of general AI market sentiment.