CoreWeave, a prominent contender in the artificial intelligence (AI) sector, submitted its application for an initial public offering (IPO) on March 3.
The organization collaborates closely with bitcoin (BTC) miner Core Scientific (CORZ); the two companies have established a multi-billion dollar arrangement for Core Scientific to construct extensive infrastructure supporting CoreWeave’s AI services. Notably, CoreWeave stands as Core Scientific’s most significant client.
This raises an important question: What impact will CoreWeave’s IPO have on Core Scientific?
“CoreWeave’s IPO is likely to have a related impact on Core Scientific,” stated Wolfie Zhao, the head of research at TheMinerMag. “Should CoreWeave’s launch on the market succeed and it maintains robust revenue growth in the future, this will reinforce Core Scientific’s role as a dependable infrastructure supplier, guaranteeing a consistent revenue stream from hosting CoreWeave’s GPUs.”
“On the flip side, if the AI market encounters a downturn or demand for high-performance computing diminishes, Core could face similar challenges, as its business increasingly connects with the larger AI ecosystem,” Zhao added.
The IPO may ultimately be overshadowed by CoreWeave’s recent $12 billion partnership with AI leader OpenAI, according to analysts at an investment bank in a note from March 12. This collaboration allows CoreWeave to broaden its revenue streams beyond Microsoft, which currently comprises about two-thirds of the company’s total revenue. Such diversification is expected to positively impact Core Scientific, considering that CoreWeave is its largest customer.
This pursuit of diversification is not expected to disrupt the relationship between CoreWeave and Core Scientific, analysts from an investment firm noted on March 11. The plans for CoreWeave’s IPO further dispel any rumors regarding their intent to terminate their contract with Core Scientific. “From a broader perspective, it’s difficult to see how that would be reasonable for CoreWeave,” they remarked. Not only do the two companies share a long-standing partnership, but they consistently negotiate new contracts for Core Scientific to provide additional infrastructure for the AI Hyperscaler.
As for Core Scientific, its executive team is “excited” about the upcoming IPO, a representative shared. “We take pride in being part of their journey toward becoming a publicly traded company and look forward to contributing to their ongoing success. There’s nothing more gratifying than witnessing our customers flourish, and we’re eager to continue growing alongside them as they achieve new accomplishments.