Cisco Systems (CSCO, Financial) has agreed to invest in CoreWeave, a prominent startup in the artificial intelligence sector, now valued at $23 billion. CoreWeave, led by CEO Michael Intrator, is planning a secondary transaction, allowing existing shareholders to sell $400 to $500 million in shares. The New Jersey-based firm is considering an initial public offering (IPO) as early as next year.
CoreWeave's investors include Nvidia (NVDA), Magnetar Capital, Coatue Management, Jane Street, and Fidelity. As an early adopter of Nvidia's data center graphic chips, CoreWeave is building data centers based on these chips to support AI-related computing tasks.
Cisco aims to ensure a major role for its technology in the rapidly expanding data center sector, which it believes will boost demand for its networking products. Initially a cryptocurrency mining company, CoreWeave transitioned to cloud computing services by leveraging large purchases of Nvidia graphic cards, strengthening its relationship with Nvidia over time.
For Nvidia, supporting CoreWeave could disrupt the current cloud computing market dominated by giants like Amazon AWS, Microsoft Azure, and Google Cloud, reflecting Nvidia's potential to influence the $2 trillion market.
