AI cloud computing startup CoreWeave has skyrocked to a $19 billion valuation, nearly tripling its worth from $7 billion just five months ago. The New Jersey-based company, founded in 2017, has secured $1.1 billion in new funding, led by Coatue, with participation from Magnetar, Altimeter Capital, Fidelity, and Lykos Global Management.
CoreWeave's rapid rise reflects the booming demand for AI cloud infrastructure and the current AI funding frenzy. The startup, which rents out graphics processing units (GPUs), has been quickly expanding its data center presence, growing from three to 14 centers in the last year, with plans to reach 28 by the end of 2024.
This success is partly due to CoreWeave's access to NVIDIA GPUs. NVIDIA, the chief supplier of GPUs for AI, has invested in CoreWeave, giving it a competitive edge over cloud providers like Amazon and Google, who are developing their own AI chips.
CoreWeave's meteoric rise can be attributed to its specialized cloud infrastructure, which is purpose-built to support the training and running of large AI models. As Michael Intrator, CEO and co-founder of CoreWeave, explained in an interview with Fortune, "We are building the largest supercomputers on the planet and we're building them again and again and again. That's what CoreWeave is uniquely qualified to do…which is why we've been able to scale the way we have."
The company's infrastructure is designed to handle the most computationally intensive workloads, with Intrator likening it to a Maserati compared to the minivan-like legacy cloud. "We built a highly performant solution that doesn't have to make all the compromises you make to build a vehicle that can do all these different things. We just want to go fast," he said.
CoreWeave's success can also be attributed to its close relationship with NVIDIA, which has provided the startup with a generous allotment of GPUs, the key component in training and running AI models. However, Intrator insisted that "we don't get preferential access to their GPUs—they're not putting us in front of Amazon."
The new funding will be used to support CoreWeave's rapid growth and expansion into new geographic regions to meet the exploding demand for GPU-accelerated cloud infrastructure worldwide. The company plans to increase its data center presence from 14 to 28 by the end of this year.
While some analysts question the sustainability of CoreWeave's hyper-specific focus on AI workloads, especially once the current AI chip scarcity eases, Intrator remains confident in the company's execution and the support of knowledgeable investors who have repeatedly invested in the startup.