As CoreWeave Inc. CRWV makes its public market debut, CEO Michael Intrator pushes back on concerns over client concentration and insists that investor skepticism is missing the company’s long-term value and growth potential.
What Happened: CoreWeave, the AI cloud infrastructure company backed by Nvidia Corp. NVDA, officially began trading on Friday in one of the year’s most anticipated IPOs.
While the company has reported explosive 700% year-over-year revenue growth, much of that success hinges on two major clients: Microsoft Corp. MSFT and ChatGPT-maker OpenAI, which together account for the majority of its income.
Critics have raised red flags over this revenue concentration, but CEO Intrator isn’t fazed.
“They say that we had 60% of revenue from Microsoft, and then we signed a contract with OpenAI for just under $12 billion, and now we’re less than 50%,” he said in an interview with Fortune on Friday. “All the big players that need this type of infrastructure … those are our customers.”
Intrator also acknowledged that the size of deals with hyperscalers like Microsoft and OpenAI naturally skews revenue distribution.
“When you win one of those mind-bendingly large deals … there will be concentration,” he added. He also pointed out that clients such as JPMorgan Chase & Co. JPM, IBM IBM, and Jane Street use CoreWeave’s infrastructure for narrower, but still valuable, workloads.
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The CEO also believes that Wall Street may not fully understand CoreWeave’s positioning yet.
“There’s a divergence between what the capital markets and what the media is thinking, and what I am feeling down in the trenches,” he said. “What I am feeling … is relentless demand. We need more compute. We need larger compute.”
CoreWeave’s IPO is seen as a key test of how public markets are responding to the AI infrastructure boom. Though the company had to scale back its initial offering, Intrator said going public was a strategic move to improve access to the debt markets and reduce capital costs.
He also dismissed concerns about entering the market too soon. “The boldness of coming to this market amid the turmoil is because of a fundamental belief that, over time, I will be able to generate enormous value for my investors,” Intrator said.
Price Action: In after-hours trading, CoreWeave shares were down by 0.07% and reached $39.97 at the time of writing, according to data from Benzinga Pro.
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