CoreWeave, the fast-growing US-based AI data centre company, is planning to raise at least $1.5 billion in fresh debt to refinance a portion of its sizeable liabilities and support further investment, just weeks after a subdued public market debut, the Financial Times reported.
The New Jersey-headquartered company is working with JPMorgan on a roadshow this week to meet prospective credit investors, as it weighs a high-yield bond offering, according to people familiar with the matter, FT said.
Early discussions suggest that CoreWeave may ultimately seek to raise more than $1.5 billion, depending on demand.
The move underscores CoreWeave’s efforts to reduce its borrowing costs by shifting some of its high-interest private loans into the public credit market, at a time when enthusiasm for AI infrastructure investments remains robust despite broader market caution.
Debt dragged CoreWeave’s IPO, but the stock has rebounded
CoreWeave’s planned debt raise comes shortly after its initial public offering in March, which was dramatically scaled back in size due to market concerns over its financial profile.
The company initially aimed to raise $2.7 billion at a valuation of $47–$55 per share, but revised the deal down to $1.5 billion at $40 per share.
The IPO was met with lukewarm investor sentiment, largely attributed to CoreWeave’s heavy debt load and a cooling in AI-related equity hype.
Nonetheless, its stock has since rebounded, gaining nearly 38% to reach $55 by Thursday, buoyed by continued investor confidence in the long-term growth prospects of generative AI.
Roughly $1 billion of the IPO proceeds have already been used to repay a bridge loan led by JPMorgan, a key player in both the IPO and the upcoming bond deal.
Analysts have flagged high debt, but CEO calls it “company’s fuel”
Founded in 2017, CoreWeave has experienced explosive growth, with revenue jumping from just $16 million in 2022 to nearly $1.9 billion in 2023.
This rapid expansion has been financed heavily by debt, with the company raising $12.9 billion over the past two years from private lenders including Blackstone and Magnetar Capital.
Most of these borrowings carried steep interest rates ranging from 11% to 15%.
As of December 2024, CoreWeave had $8 billion in total debt.
Of that, $7.5 billion in principal and interest obligations fall due by the end of 2026, placing the firm under pressure to restructure or refinance at more favourable terms.
Analysts have earlier pointed at the company’s high debt as one of the reasons for its subdued post-IPO performance, even though CEO Mike Intrator has defended it, saying debt is “the engine, the fuel for this company.”
“Whenever you see debt on our balance sheet, you’re going to see an offsetting revenue contract that is larger,” he said in a recent CNBC interview.
JP Morgan however warned last month that the capital-intensive nature of CoreWeave’s operations, driven by debt, may not appeal to risk-averse investors, calling the company “a wild, lumpy, volatile ride.”
Proposed bond to be unsecured, issued by parent entity
The current effort marks a shift from CoreWeave’s earlier financing model, which involved setting up special-purpose vehicles backed by AI chips and customer contracts.
The new proposed bond, however, would be unsecured and issued by the parent entity itself, according to a pitch document seen by the Financial Times.
CoreWeave’s growing clout in the AI ecosystem is bolstered by its close relationship with Nvidia, which not only supplies the bulk of the 250,000 AI chips underpinning CoreWeave’s infrastructure but also holds a 5% stake in the company.
Nvidia further participated in the IPO with a $250 million share purchase, underscoring its commitment to the data centre operator.
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