CoreWeave, an AI-specific cloud service provider backed by Nvidia, has filed its initial S-1 document for its upcoming IPO, revealing several surprises about the company's operations and finances. According to the filing, CoreWeave operates a network of 32 data centers with over 250,000 Nvidia GPUs, as well as Nvidia's latest product, Blackwell, which supports AI reasoning.

The company is expected to raise at least $3.5 billion at a $32 billion valuation, and possibly over $4 billion, according to IPO specialists at Renaissance Capital. This represents a significant leap from its last valuation in November, when it closed a $650 million secondary share sale that valued it at $23 billion.

One surprising aspect of the filing is that CoreWeave's three co-founders have already sold off a substantial portion of their Class A holdings between two tender offers in 2024 and 2023. As a result, they have collectively cashed out nearly $488 million worth of shares. Despite now owning less than 3% of the Class A shares, the trio will retain control of the company through their majority ownership of CoreWeave's Class B shares, which carry 10 votes per share.

Another unusual aspect of CoreWeave is the backgrounds of its co-founders, who hail from the oil industry hedge funds rather than tech. To bolster their technical expertise, they hired Chen Goldberg from Google Cloud as CoreWeave's senior vice president of engineering. Goldberg previously led Google's Kubernetes and serverless team.

Nvidia has a significant stake of more than 6% in CoreWeave and is also a CoreWeave user, forming a powerful alliance. This partnership has contributed to CoreWeave's remarkable revenue growth, with the company reporting $1.9 billion in 2024, nearly an eightfold increase from just $228,943 in 2023.

However, a closer examination of CoreWeave's revenue reveals that a single customer, Microsoft, accounted for 62% of that revenue. Interestingly, CoreWeave has listed Microsoft as both a customer and a competitor, as it did with IBM. Despite this, CoreWeave's customer list is impressive, including Cohere, Meta, and Mistral.

Despite its revenue growth, CoreWeave remains unprofitable, logging significant losses of $863 million in 2024 alone. The company also has a substantial debt burden of $7.9 billion. However, the founders, leveraging their financial expertise, frame this debt as a feature rather than a burden, calling their finances "sophisticated" and claiming to have "pioneered GPU infrastructure-backed lending."

The company's GPU collection is so valuable that it can be used as collateral, but servicing the debt comes at a steep cost – $941 million in 2024 alone, contributing to the company's losses. CoreWeave has indicated that it may use some of the money raised in the IPO to reduce its debt burden.

The success of CoreWeave's IPO remains to be seen, but the company's focus on AI and its impressive revenue growth are likely to attract significant interest from investors. CoreWeave declined further comment on the matter.

In conclusion, CoreWeave's IPO filing provides a unique glimpse into the company's operations and finances, revealing both impressive revenue growth and significant debt. As the company moves forward with its IPO, it will be interesting to see how investors respond to its unusual blend of AI expertise and financial sophistication.