CoreWeave chief executive Michael Intrator and executives at private equity giant Blackstone got together in the summer of 2023 in a WeWork in Brooklyn to hash out the terms of a large and unusual loan.
That first deal would lead to one of the largest private financings in US corporate history, Blackstone’s biggest single loan commitment and transformed a seven-year-old start-up into an artificial intelligence infrastructure behemoth.
On Friday, CoreWeave became the largest tech company to publicly list its shares in 18 months. The initial public offering was far smaller than planned, raising about half of what its bankers asked investors for last week at a market valuation of $23bn — about $10bn less than initially hoped.
That fall reflected doubts over the company’s massive huge debt burden, complex financial structure, close relationship with chipmaker Nvidia and high customer concentration risk.
But the listing remains a landmark moment for Intrator, 55, whose stake in the company is worth about $3bn. His appetite for extreme leverage and risky decision-making has grown CoreWeave from a small crypto-mining business to an AI computing giant in a market dominated by hyperscalers such as Microsoft and Amazon.
“It wasn’t like talking to Steve Jobs who was trying to sell a vision,” said a person close to the Blackstone deal. “[Intrator] is hyper-rational, cerebral, someone who doesn’t leave the details to others.”
The deal, agreed in July 2023, meant Blackstone would lead a $2.3bn debt financing to CoreWeave, whose revenue was just $16mn at the time. Blackstone’s exuberance was a sign of the times. Months earlier, OpenAI had released ChatGPT and investors were racing for access to AI deals. Barely a year later, Blackstone signed a second debt deal with CoreWeave worth $7.6bn.
The loans were secured against CoreWeave’s stash of Nvidia graphics processing units — the chips that have become the hottest commodity for companies building AI systems — as well as contracts it had agreed to lease computing power to Big Tech companies.
Intrator used the cash to buy tens of thousands more GPUs from Nvidia, growing CoreWeave’s stockpile to more than 250,000 chips, allowing it to attract more and larger customers and increase revenue to $1.9bn by 2024. He started to treat CoreWeave’s growth like a structured credit play, according to people who know him, viewing its assets like securities that could be bundled and sold to investors.
The success of these deals pioneered a flurry of asset-backed lending with other big investors extending loans to chip-rich AI start-ups — although none quite at the scale of CoreWeave.
“No one had ever heard of GPU financing or CoreWeave before Blackstone made the large loan into them,” said the person close to the deal.
Both luck and foresight meant Intrator was holding a golden ticket at exactly the moment the AI industry hit its Cambrian explosion.
Intrator, who wears thick-rimmed glasses, flannel shirts and Hoka trainers, spent most of his career as a commodities trader, buying and selling carbon credits and natural gas futures. He worked first at Natsource, a renewables fund manager, and then at his own hedge fund, Hudson Ridge Asset Management.
He bought his first GPU while running Hudson Ridge to kick-start a side hustle in cryptocurrency mining — the business that would eventually become CoreWeave.
“In 2016, we bought our first GPU, plugged it in, sat it on a pool table in a lower Manhattan office overlooking the East River, and mined our first block on the ethereum network,” Intrator wrote in a blog post.
He spun the venture out into a company initially named Atlantic Crypto, alongside co-founders Brian Venturo, a partner at Hudson Ridge, and Brannin McBee, an energy trader at a fund in Houston.
They soon moved out of the Manhattan skyscraper, fearing the heat from the servers risked burning down the building, instead setting up in a garage in a New Jersey suburb that would become their first data centre.
“One GPU turned into hundreds, then tens of thousands,” Intrator wrote.
The buying spree accelerated after crypto prices crashed in 2019 and GPUs could be bought at distressed prices. They pivoted the business, first to lease compute capacity to video game rendering, and then to AI developers.
This early and prolific collecting of GPUs put CoreWeave in good standing with Nvidia, which added the company to its “partner network” and allocated it large sums of chips. By early 2023, Nvidia was CoreWeave’s largest supplier, one of its biggest customers, and had invested $100mn in the company, owning about 6 per cent.
On Thursday, as CoreWeave was forced to cut the size and price of its IPO, Nvidia stepped in as one of the biggest buyers, spending $250mn to increase its stake in the business.
Intrator cultivated another early relationship that went on to pay big dividends for CoreWeave years later, according to people close to the company. Inflection AI, a start-up founded by ex-DeepMind co-founder Mustafa Suleyman and LinkedIn founder Reid Hoffman, was one of CoreWeave’s first big customers. Suleyman moved to Microsoft as head of its AI business early last year.
By the end of last year, Microsoft accounted for 62 per cent of all of its revenues and had signed contracts worth about $10bn. People close to the matter said Suleyman and Hoffman, who sits on Microsoft’s board, were central to CoreWeave making inroads with chief Satya Nadella.
The three CoreWeave founders have already made a fortune, each selling at least $150mn worth of their stock in the company since December 2023, according to the IPO filings
CoreWeave’s listing has been closely scrutinised as a signal of the confidence in massive spending on AI in recent years.
Big Tech companies have allocated hundreds of billions of dollars to building the infrastructure that will power their AI models.
But there are mounting signs of a glut of supply. Microsoft has backed out of construction on some data centres, according to analysts, with Nadella warning of an “overbuild” earlier this year. It also walked away from a multibillion-dollar commitment to CoreWeave that it had not yet signed as a contract, according to people familiar with the matter.
Intrator, who has faced tough questions in run-up to the IPO, is neither a fan of the hard sell nor the limelight, according to people close to him. Life on the public markets may cause further unrest.
On Friday, just before CoreWeave started trading, Intrator told the Financial Times it would take “a while” for public markets investors to understand its business model.
“But our expectation is that the equity markets, very much like the debt markets, after they get to spend some time with the company . . . they will get very comfortable.”
