CoreWeave, an artificial intelligence startup that rents out chips to other companies, on Friday, October 11, announced that it has a new credit line for $650 million.
The specified firm, backed by Nvidia, intends to spend the mentioned funds to expand its business and data center portfolio.
Also, this startup specializing in cloud infrastructure announced that over the past 18 months, it has managed to raise $12.7 billion from equity and debt investors, including a $1.1 billion round in May. It is worth noting that in May, the company’s valuation was fixed at $19 billion.
By the end of the current year, the startup plans to have 28 data centers across the United States and abroad. The corresponding functional facilities will be put into operation, including in Austin, Chicago, Las Vegas, and London. Next year, the company intends to build 10 more data centers.
In the past, CoreWeave supplied graphics processing units to Microsoft and Mistral AI, a French startup operating in the artificial intelligence industry.
As of last year, the company had revenue of $2 billion under contract lined up for 2024.
It is worth noting that artificial intelligence models as functional systems from the point of view of the peculiarities of development and the process of subsequent operation are characterized by the need for significant financial injections. Thousands of specialized chips are also needed in this case. Nvidia is currently the main developer of the relevant products. The vast majority of players in the artificial intelligence industry spend hundreds of thousands of millions to billions of dollars to buy chips from the mentioned company. Nvidia has taken stakes in emerging AI firms such as CoreWeave. These actions of the main developer of artificial intelligence chips are aimed at ensuring the wide deployment of its products.
Goldman Sachs, JPMorgan Chase, and Morgan Stanley led the financing CoreWeave announced on Friday. Barclays, Citi, Deutsche Bank, Jefferies, Mizuho, MUFG, and Wells Fargo are also participating in this project.
Mike Intrator, CoreWeave’s co-founder and chief executive officer, stated that the new credit line provides additional liquidity to accelerate the company’s growth strategy and capitalize on new opportunities in the rapidly developing artificial intelligence industry.
It is worth noting that banks are currently demonstrating strong intentions to participate in the so-called AI gold rush. The corresponding activity of financial institutions has increased in anticipation of several potential initial public offerings (IPOs) in the relevant industry. The new credit line CoreWeave is one example of the tendency of banks’ involvement in the area of artificial intelligence. In this case, involvement is implied in the provision of financing to industry players.
According to preliminary estimates of analysts, by 2032, the revenue of the generative artificial intelligence market may exceed the $1 trillion mark.
It is also worth noting that during the period of active development and spread of AI, the issue of cybersecurity has become more relevant. Scammers also have access to artificial intelligence technologies, which is why their activities have recently become more sophisticated. To counter the corresponding threat in the cybersecurity area, personal awareness of users is important. For example, an Internet search query such as how to know if my camera is hacked will allow anyone to get information about signs of unauthorized access to the device. Digital literacy is an effective tool to combat cybercrime.
