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CoreWeave is preparing to raise about $1.5bn in debt that could be used to refinance part of its massive liabilities just weeks after the artificial intelligence data centre operator listed in New York to a muted reception from investors.
The US group is holding a roadshow this week with bankers at JPMorgan for debt deals that are expected to include a high-yield bond offering, according to people familiar with the matter.
CoreWeave executives intend to use the meetings to gauge investor interest before deciding the final size of the deal, the people said.
But early talks with investors and bankers indicated the group, which leases computing capacity to technology companies building AI models, could attempt to raise more than $1.5bn.
Those familiar with CoreWeave’s plans said refinancing part of its large debt pile in the public credit markets at lower rates would allow CoreWeave to reduce its cost of borrowing. One person close to the company added the money could be used to invest further in its operations.
The New Jersey-based company listed its shares in March in a drastically downsized initial public offering. It had initially targeted a $2.7bn raise at $47-$55 per share, but slashed it to $1.5bn at $40 per share, following investor concern about its large debt burden and a softening market for AI infrastructure.
Its stock has climbed in value by around a third since then to $55 per share on Thursday, as markets remained bullish over the growth of the AI market.
CoreWeave has grown rapidly amid an explosion in AI in the past two years. Its revenue has soared from $16mn in 2022 to $1.9bn last year.
But the company borrowed extensively to fuel its growth, raising $12.9bn of debt in the past two years to build data centres as demand for products and services powered by generative AI has boomed.
CoreWeave had about $8bn of total debt on its balance sheet as of December 2024. The majority was raised through private credit deals with investors such as private equity group Blackstone and hedge fund Magnetar Capital at high interest rates of between 11 and 15 per cent.
About $1bn of the IPO proceeds was earmarked to settle a bridge loan from a consortium of banks led by JPMorgan, which was also a bookrunner on the listing. The FT has also reported that CoreWeave is facing debt and interest payments of $7.5bn by the end of 2026.
That debt is secured against its portfolio of more than 250,000 Nvidia AI chips and contracts with customers such as Microsoft.
Nvidia is also one of CoreWeave’s biggest investors, owning about 5 per cent of the company, while being one of its largest suppliers and customers. The chip giant also bought $250mn of shares in the IPO.
A pitch deck for potential credit investors seen by the Financial Times showed that the bond would be issued by CoreWeave, the parent company, rather than a subsidiary.
Previously, CoreWeave has created special purpose vehicles for its large loans, which are secured against assets such as computing chips and customer leasing contracts. People close to the matter said the new debt would be unsecured, unlike almost all of its existing loans.
CoreWeave and JPMorgan declined to comment.