CoreWeave Inc. Chief Executive Officer Mike Intrator, facing a plunge in the company’s stock and bond prices, said the market is acting “irrationally” and that he remains confident in the AI cloud company’s business model.
CoreWeave’s deal backlog is large enough to more than support its debt obligations, Intrator said in an internal memo reviewed by Bloomberg News. The executive made the remarks after the AI cloud company’s bonds tumbled to levels that typically indicate distress.
The company’s shares fell 15 per cent to $65.78 on Wednesday, marking their biggest single-day decline since February. The stock had gained 8.7 per cent this year through Tuesday’s close.
“When you are building a new type of technology company, there will be periods of time when the market misunderstands and acts irrationally,” Intrator wrote to staff. “We are confident in our business model, our customers, the extraordinary quality of our execution, and the relentless discipline around the financial engine we have built.”
A spokeswoman for CoreWeave confirmed the authenticity of the email.
CoreWeave, since its public debut last year, has become one of the most high-profile gauges of the worldwide AI infrastructure boom for investors. While the stock has soared by more than 60 per cent since it listed, handing the company a valuation of nearly $37 billion, investors have grown increasingly concerned about the prospects of an AI bubble and the tens of billions of dollars being borrowed across the industry to fund an unprecedented buildout of data centers.
Intrator said “factors like the weakness and delays surrounding the attempted IPOs and debt financings” of several CoreWeave rivals “are bleeding into the narrative around CoreWeave.”
Data center operator AirTrunk is delaying a planned initial public offering of a real estate investment trust in Singapore until next year as higher interest rates and market volatility temper investor demand, according to people familiar with the matter who asked not to be identified because the information is private.
The Nvidia-backed data center operator Firmus Grid Ltd. pulled a deal last week to raise as much as $5.5 billion in an IPO after investors balked at its steep increase in valuation to $30 billion. The Australian company is now exploring a private round with existing investors.
AI data center developer Nscale filed for an IPO in New York last month. The AI cloud computing provider Lambda may also seek to go public next year, Bloomberg reported in August.
“They don’t have what we have built,” Intrator said in his internal memo, referring to companies seeking public listings and debt financings and specifically naming Firmus, AirTrunk, Lambda and Nscale. “These companies are trying to raise enormous amounts of capital without the execution, revenue, scale, or software solutions that CoreWeave delivers to its customers.”
Firmus, AirTrunk, Lambda and Nscale didn’t respond to requests for comment, some of which were sent outside of normal business hours.
Intrator signaled that the company will further address the market reaction during its next earnings call. “I, for one, am looking forward to having the opportunity to put the facts in front of the market,” he said.
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