CoreWeave Data Center Investment Tally Gains Blackstone, Crowns AI Hyperscaler Ambitions

May 22, 2024
The flood of financing engulfing NVIDIA favorite CoreWeave, based on unprecedented hyperscale demand for AI and GPU compute capacity, is something to behold.

CoreWeave last week announced it has raised $7.5 billion in debt to fund the growth of its AI data center business. The news follows the company's recent $1.1 billion equity round, and will translate into a lot of GPU and data center capacity.

As announced on May 17, the self-described "AI hyperscaler" signed a definitive agreement for a $7.5 billion debt financing facility led by funds managed by Blackstone, which of course also owns QTS Data Centers and here continues to deepen its investment in digital infrastructure.

Brad Marshall, Global Head of Private Credit Strategies at Blackstone, said, "We are excited to lead one of the largest private credit financings in history. CoreWeave has established itself as a leading provider of critical infrastructure to support the AI revolution and we're looking forward to partnering with the company on its growth journey."

Regarding the funding, Jasvinder Khaira, a Senior Managing Director, and John Watson, a Managing Director, at Blackstone, also issued a joint statement, adding:

"We are thrilled to expand our existing partnership with CoreWeave and strengthen its market leadership in providing the specialized GPU cloud infrastructure required to support today's explosive growth in AI." 

"AI and digital infrastructure are among our highest conviction themes at Blackstone and we are excited to leverage our global platform and flexible capital to support management as it rapidly deploys AI infrastructure at enormous scale."

A Flood of Investment

According to a press release chronicling the flood of investment, participation in the financing also included strategic participation from Magnetar as co-lead investor, along with Coatue. 

"As the first institutional investor in CoreWeave, we have witnessed firsthand their remarkable evolution from a small startup to a go-to-market leader in advanced AI computing solutions," said David Snyderman, Chief Investment Officer and Managing Partner at Magnetar.

He added, "Given their already substantial and expanding AI infrastructure capabilities, coupled with enhanced institutional backing, CoreWeave is exceptionally well-positioned to deliver high performance compute."

Carlyle, CDPQ, DigitalBridge Credit, funds and accounts managed by BlackRock, Eldridge Industries, and Great Elm Capital Corp. all also participated in the round. 

The $7.5 billion in debt financing will be used to further develop CoreWeave's growing fleet of HPC data centers to execute existing contracts with leading enterprise customers and AI innovators, the company said.

The new funding announcement builds on CoreWeave's exponential momentum and growth, evidenced by over $12 billion raised from equity and debt investors over the last 12 months. 

This included a landmark $1.1 billion Series C in May 2024 led by Coatue, and a $2.3 billion debt financing facility led by Blackstone and Magnetar in August 2023. 

"CoreWeave is building the infrastructure to power the AI innovations that are already changing how businesses operate in the global economy," noted Michael Intrator, CoreWeave's CEO and co-founder, who added:

"The caliber of investors in this large debt financing round is a powerful testament to both the insatiable market appetite for AI infrastructure and their belief in CoreWeave's ability to deliver cutting edge innovation for the largest AI labs and innovators at scale. And we are really just getting started - our ambitions are to help reshape the cloud landscape, accelerate the AI race, and power the next generation of AI innovation that is changing the course of history."

CoreWeave's Rapid Growth Alongside NVIDIA

In 2023, CoreWeave more than quadrupled its data center presence from three to 14 facilities operating, and anticipates doubling its data center footprint to 28 globally by the end of 2024. 

The company also recently announced its new European headquarters in London - alongside a commitment to invest $1.25 billion in the region. 

The former cryptocurrency miner'a name was among the first in the hyperscale sector to become synonymous with NVIDIA's GPU business.

And being on NVIDIA's go-to list is a good place to be. Today, NVIDIA announced its latest round of mind-boggling Financial Results for First Quarter Fiscal 2025.

NVIDIA reported record quarterly revenue of $26.0 billion, up 18% from Q4 - and up an astonishing 262% from a year ago. 

NVIDIA also announced record quarterly Data Center segment revenue of $22.6 billion, up a tidy 23% from Q4, and up a staggering - wait for it - 427% from a year ago.

 

 

On a recent episode of CNBC Television's 'Closing Bell Overtime', CoreWeave CEO Michael Intrator discusses the company's recent funding and competition in the AI space.

 

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About the Author

Matt Vincent

A B2B technology journalist and editor with more than two decades of experience, Matt Vincent is Editor in Chief of Data Center Frontier.

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