Coreave in the midst of the artificial intelligence revolution, and its public subscription appears to be like cards home

Today, Coreave has started trading in the stock market, and it appears to be a fateful start for the artificial intelligence sector. The company initially hoped to sell the shares for $ 47 to $ 55 per piece, but it started trading at $ 39 despite being Supported by nvidia With a huge order of $ 250 million at a price of $ 40 per share. When you look under the cover, Coreweave is a dog for a company, with the basics of business that raises a lot of questions, and explain the demand less than enthusiastic by investors.

In recent years, Coreove has found in something of its envy. Starting in 2017, graphics processing units have bought to provide encrypted currency mining industry, just to reach artificial intelligence when that new new trend became. Coreave is basically a company choosing and shovel: it provides graphics processing units to an industry that it sought desperate.

Unfortunately, it seems that the industry does not need that day. Coreave is just as the audience, as its customers, Microsoft, have been returned to spending in the infrastructure of Amnesty International, Launching its rent In the world levels and allow Openai I am looking for other partners. The chips were suddenly required after Openai Chatgpt was released in 2023, but it seems that the deficiency of the width is declining in a way that may be bad for Coreave. from Wall Street Journal:

Since then, the lack of supply has decreased, and companies say it is relatively easy to buy the required chips. Renting the graphics processing unit for an hour is about $ 5.50 in mid -2013; Evan Conrad, CEO of San Francisco Combot, a GPU market, said it is now $ 1.55.

To put the risks here in the context, Microsoft was welcomed 62 % of Coreave’s revenues in 2024. But it refused to choose another $ 12 billion in infrastructure, which had to be taken by Openai instead.

Moreover, NVIDIA was a major supporter of Coreweav 6-7 % of NVIDIA works. Support by only two companies, Microsoft and NVIDIA – which cools the previous on artificial intelligence – does not seem like the position of strength.

Worse, Kuruv suffocates under the burden of heavy debt. Despite the $ 1.9 billion in 2024, Coreweave burned 6 billion dollars last year and $ 1.1 billion in the previous year due to heavy expenditures to build its Amnesty International’s infrastructure. The eyebrows have been raised in the past due to carrying approximately $ 8 billion of debt and the use of graphics processing units themselves as a guarantee, which seems to be certainly related to the low prices of the graphics processing unit and require artificial intelligence models more efficiently less resources. At least, Coreweave is expected to raise about $ 1.46 billion in the general offering that will be allowed to pay some debts.

If Coreave continues to be steeped in the coming days and weeks, this may cause problems for other artificial intelligence companies that hope to advertise. They also need it – the returns of demand for their investment, especially with a few companies that have been published in recent years. Technology companies have fallen into the first trading in the past only for apostasy, so today is not necessarily death for Coreave. President Trump’s identification strategy hurts the broader securities market in recent days.

Coreove can be considered, if anything, the first scale for the current GPU market pressure. The CEO of Nvidia Jensen Huang and others in the industry have argued that the new “Thinking” models require more resources, and since more consumers use artificial intelligence, the demand for graphics processing units may continue to rise for years to come even when the models become more efficient. But again, these are the options and companies of drivers; Of course they will say that you need more shots and shovels. Sam Al -Taman from Openai Posted on X Yesterday, this demand for the new Chatgpt image generator was “melting” graphics processing units. If this is a short -term heresy as people Grady Studio made Ghibli KnockoffsOr something more sustainable, it is still seen.

Either way, there is no doubt that Kuruv seems to be on a particularly shaken land. What happens with the continued decrease in the prices of chips and the main technological giants The construction of their NVIDIA competitors At home? So why will Coreave will be a company worth $ 32 billion, as it is expected to be estimated on the first day of trading? What if the AGI boom does not come? This company has been supported by excessive noise over the past two years, as the sale of options and compliments, before any other critical Amnesty International has become public and has proven that these products are more than the predictions of the following glorious words with the reliability of a non -paid trainee.

“None of these companies make any profit from artificial intelligence, and outside Openai, there is no actual demand for these services,” said Ed Zetron, a public relations expert and a better internet host. “If there was, Microsoft was just withdrew from 2GW from the future account capacity.”

The three Coreave founders will be well in both cases. They spent 500 million dollars Of their property between 2023 and 2024.