CoreWeave, an artificial intelligence startup backed by Nvidia has signed a five-year contract worth $11.9 billion with OpenAI ahead of its hotly anticipated stock market launch.

As part of the pact, CoreWeave will provide AI infrastructure to OpenAI, CoreWeave said in a statement on Monday, confirming an earlier exclusive report from Reuters.

The deal will give OpenAI a stake in CoreWeave, which will issue shares worth $350 million to the ChatGPT maker through a private placement at the time of its initial public offering.

Livingston, New Jersey-based CoreWeave, which is one of the hottest AI startups in the U.S., will not receive any proceeds as part of the share issue to OpenAI.

"CoreWeave is an important addition to OpenAI's infrastructure portfolio, complementing our commercial deals with Microsoft and Oracle, and our joint venture with SoftBank on Stargate," said Sam Altman, CEO of OpenAI.

The deal provides a major boost to CoreWeave ahead of its blockbuster share sale, which is expected to headline the U.S. IPO lineup for 2025.

The discussions with OpenAI come at a time when investor interest in generative AI is sky-rocketing. The AI boom, which has powered chipmakers such as Nvidia and other big tech firms, has driven a surge in global demand for infrastructure such as data centers and high-powered servers.

A successful IPO for CoreWeave could pave the way for other AI startups that have recently considered tapping public markets. Data center operator Switch has been weighing an IPO at a valuation of about $40 billion, including debt, Reuters reported last year.

Marquee IPO

Founded in 2017, CoreWeave provides access to data centers and high-powered chips for AI workloads, mainly supplied by Nvidia. It competes against cloud providers such as Microsoft's Azure and Amazon's AWS.

CoreWeave, whose customers include big tech companies including Meta, IBM, and Microsoft, is expected to target a valuation of more than $35 billion in its stock market listing, Reuters reported in November.

In its IPO filing earlier in March, CoreWeave reported revenue of $1.92 billion in 2024, compared with $228.9 million a year earlier. Its net loss widened to $863.4 million during the same period from $593.7 million in 2023. Roughly two-thirds of its revenue came from Microsoft, which is the company's biggest customer.

CoreWeave has raised more than $14.5 billion in debt and equity across 12 financing rounds, according to data compiled by Reuters. Last year, CoreWeave raised over $7 billion in one of the largest private debt financing rounds in history, led by asset managers Blackstone and Magnetar.

Morgan Stanley, JPMorgan Chase, and Goldman Sachs are the lead underwriters for CoreWeave's upcoming stock market flotation. CoreWeave's shares are expected to trade on the Nasdaq under the symbol CRWV.