By Crystal Hu
(Reuters) – Specialty cloud provider CoreWeave has raised $2.3 billion in a debt facility led by Magnetar Capital and Blackstone and backed by Nvidia chips, with the money to be used to expand to meet rising AI workloads the company said Thursday.
Other lenders in the facility include Coatue and DigitalBridge, as well as BlackRock, PIMCO and Carlyle. The unusual use of Nvidia H100, the sought-after chip powering AI computing as collateral, highlights the value of such hardware in the capital-intensive AI arms race.
The outsize loan also marks the growing asset-backed private financing market as private equity firms turn to lower-risk loans backed by hard assets and take on more corporate debt when banks slow down.
“We negotiated with them to find a schedule for how much collateral went in, what would be the amortization schedule versus the payout schedule,” said CoreWeave CEO Michael Intrator. “For us, going out and borrowing against the asset base is a very cost-effective way to access the debt markets.”
Nvidia-backed CoreWeave has received a boost from the generative AI boom thanks to its purpose-built cloud infrastructure at scale. It has partnerships with AI startups and cloud providers, which it also competes with, to build clusters to power the AI workload.
The company has unique access to the most advanced Nvidia chips in short supply, giving it an edge in competition with traditional cloud providers such as Microsoft, Amazon and Google, who face supply constraints as they work to develop their own chips .
The new funding will be used to purchase more graphics processing units, invest in data centers and hire staff, the company said. It announced a $1.6 billion data center in Texas last week and aims to expand to 14 in the US by the end of the year.
CoreWeave also raised $421 million in equity this year led by Magnetar Capital with a valuation of more than $2 billion.
(Reporting by Krystal Hu in New York; editing by Conor Humphries)
