CoreWeave plans $3 billion debt sale and stock program to fuel AI expansion

CoreWeave is launching a massive capital raising campaign, announcing plans to raise $3 billion through a convertible debt sale alongside a new stock offering that could bring in nearly $3 billion more.

The Nvidia-backed specialist cloud provider is looking to secure the vast sums of cash needed to build out the high-performance data centres that power artificial intelligence. Under the terms of the debt offering, initial buyers will also have the option to purchase an additional $500 million in notes.

Why is CoreWeave raising $3 billion?

CoreWeave is seeking to rapidly expand its infrastructure to keep pace with the global AI boom. Alongside the debt, the company is setting up an at-the-market equity program to sell up to 35 million shares. At its recent closing price, that stock sale could raise roughly $2.92 billion, though the company said the actual sales will depend on market conditions.

The stock program is being managed by a roster of Wall Street banks including Deutsche Bank, Goldman Sachs, and J.P. Morgan. CoreWeave has described the fundraising as part of its broader plan to build an investment-grade credit profile.

Convertible debt allows investors to exchange their bonds for shares later on, which can dilute existing shareholders. To address this, CoreWeave said it plans to use a portion of the raised funds to buy anti-dilution protections, with the remainder going toward general operations.

What is the scale of CoreWeave's expansion?

The fundraising highlights the sheer volume of capital required to stay competitive in the AI infrastructure race. CoreWeave has been expanding its capacity at a rapid clip, revealing that its contracted power capacity has grown to 4.2 gigawatts, up from 3.7 gigawatts at the end of June.

That capacity is translating into huge financial commitments from tech companies. In August, CoreWeave reported a second-quarter revenue backlog of $104.2 billion, and it has since signed more than $25 billion in additional customer commitments early in the third quarter.

Securing electricity has become one of the biggest bottlenecks in the AI sector, which explains why CoreWeave is locking down power commitments and rushing to raise the capital to build them out. The company also disclosed that its recent short-term customer contracts for compute capacity are pricing at about $40 million per megawatt on an annualized basis.

How did the stock market react?

Investors reacted cautiously to the prospect of new shares entering the market. CoreWeave shares slipped more than 2% in premarket trading following the announcement. Even with that dip, the stock has performed strongly this year, climbing more than 16% up to its previous close.