CoreWeave, an artificial intelligence startup backed by Nvidia (NVDA.O), has signed a five-year contract worth $11.9 billion with OpenAI to provide cloud computing services ahead of its hotly anticipated stock market launch, people familiar with the matter told Reuters on Monday.
The deal will give OpenAI a stake in CoreWeave, which will issue shares worth $350 million through a private placement at the time of its initial public offering, the sources said, requesting anonymity as the discussions are confidential.
CoreWeave will not receive any IPO proceeds as part of the share issue to OpenAI, the sources said. The company is expected to list its shares in New York in the coming weeks, the sources added, cautioning that the timing and size of CoreWeave's stock market launch are subject to market conditions and the terms of the deal with OpenAI could change.
CoreWeave declined to comment. OpenAI did not immediately respond to requests for comment.
If the talks are successful, the deal would provide a major boost to CoreWeave ahead of its blockbuster share sale, which is expected to headline the U.S. IPO lineup for 2025.
The discussions with OpenAI come at a time when investor interest in generative AI is skyrocketing. The AI boom, which has powered chipmakers such as Nvidia and other big tech firms, has turbocharged global demand for infrastructure such as data centers and high-powered servers.
Founded in 2017, CoreWeave provides access to data centers and high-powered chips for AI workloads, mainly supplied by Nvidia. It competes against cloud providers such as Microsoft Azure and Amazon's (AMZN.O) AWS.
CoreWeave, whose customers include tech giants Meta (META.O), IBM (IBM.N) and Microsoft (MSFT.O), is expected to aim for a valuation of more than $35 billion in its stock market listing, Reuters reported in November.
In its IPO filing earlier in March, CoreWeave reported revenue of $1.92 billion in 2024, compared with $228.9 million a year earlier. Its net loss widened to $863.4 million during the same period from $593.7 million in 2023.
Morgan Stanley, JPMorgan Chase, and Goldman Sachs are the lead underwriters for CoreWeave's upcoming stock market flotation.
