CoreWeave's IPO Faces Scrutiny Over Aging GPU Inventory and Debt Risks

The AI cloud provider targets a $26 billion valuation but confronts challenges from rapid hardware advancements and $8 billion in GPU-backed debt.

CoreWeave is marketing a $2.7 billion IPO, with a valuation target of $26 billion, down from an earlier estimate of $35 billion due to market volatility.
The company relies heavily on Nvidia Hopper GPUs, which are losing value as Nvidia's Blackwell GPUs, offering significantly superior performance, enter the market.
CoreWeave's $8 billion debt, largely tied to GPU purchases, raises concerns about the financial impact of accelerated depreciation on its infrastructure.
A $11.9 billion contract with OpenAI, including a $350 million equity stake, strengthens CoreWeave's position as it navigates these challenges.
Industry trends, such as Amazon's decision to shorten the useful life of its servers, highlight the financial risks posed by rapid AI hardware innovation.