CoreWeave, a provider of AI data centre infrastructure, is looking to raise about $1.5 billion (£1.1bn) in debt that could be used to refinance part of its large liability pile, following an underwhelming New York IPO in March, the Financial Times reported.
The company was holding a roadshow last week with JPMorgan bankers for debt deals that are expected to include a high-yield bond offering, the paper said, citing unnamed sources.
Executives intend to finalise the size of the deal based on investor interest, but early talks with investors and bankers indicate it could attempt to raise more than $1.5bn.
AI growth
Refinancing part of CoreWeave’s large debt pile in the public credit markets at lower rates could allow the New Jersey-based company to substantially reduce its cost of borrowing, the paper’s sources claimed.
The money could also be used to invest further in its operations.
CoreWeave had planned to raise $2.7bn in its IPO earlier this year but slashed the offering to $1.5bn after investors expressed concern about its heavy debts.
The offering also came at a time of softening demand for AI infrastructure, in part due to the influence of Chinese start-up DeepSeek, whose high-performance generative AI tools require a fraction of the tech costs of those from major tech firms.
CoreWeave has grown rapidly due to exploding demand for AI services over the past two years, and has seen its revenue soar over the period, reaching $1.9bn last year from only $16m in 2022.
Debt pile
The firm’s growth was fuelled on large borrowings, amounting to $12.9bn of debt amassed in the past two years to construct AI-focused data centres.
The company had about $8bn of total debt on its balance sheet as of last December, with about $1bn of its IPO proceeds earmarked to settle a bridge loan from a consortium of banks led by JPMorgan, the FT reported.
The paper previously reported that the company was facing debt and interest payments of $7.5bn by the end of 2026, with debt secured against assets such as 250,000 Nvidia AI chips and contracts with Microsoft and other major players.
The new debt is planned to be unsecured, unlike almost all of CoreWeave’s existing loans, the FT report said.