Nvidia-backed CoreWeave targets 2028 profitability as AI demand surges

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The company said it has enough cash flow from existing customer commitments to repay current debt. Read more at straitstimes.com.

CoreWeave, backed by chips giant Nvidia, has emerged as a focal point of growing AI bubble fears.

CoreWeave said on Nov 10 it would become profitable on an adjusted basis in the first half of 2028, as the AI cloud company sought to reassure investors that strong demand and customer commitments will support its debt-fuelled expansion.

Shares of the Nvidia-backed company were up 5% in extended trading after it also said it does not see any material risks to its data centre build-out from a potential shift in regulatory landscape after the Democrats’ sweeping win in the US midterms.

CoreWeave shares have crashed more than 40% in the past month after the firm emerged as the focal point of growing AI bubble fears, with investors worried about heavy borrowing for setting up data centres against the backdrop of rising interest rates and the pace of returns on the massive investments.

The steep sell-off also triggered a broader crisis of confidence in the AI trade. Earlier in the day, AI juggernaut Anthropic kicked off a roadshow for its share sale at a lower target valuation than earlier estimates.

Easing some jitters, CoreWeave said it would not tap unsecured debt markets at current yields and that it had enough cash flow from existing customer commitments to repay current debt and any additional borrowing needed to fulfil those contracts.

CoreWeave had about US$46.9 billion (S$60.09 billion) in total debt as of the end of September. It expects to raise less than US$5 billion in additional capital through 2027.

Chief executive Mike Intrator said the company had US$9 billion in customer prepayments and deposits that will flow in over the next three months.

“Customer contracts come first, and investment follows. Because CoreWeave’s investments are tied to committed demand, lenders have something concrete to lend against and customers typically help fund the build-out,” he said in a statement.

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