Today we got the widely anticipated debut of CoreWeave. It's a company that's built a next generation cloud platform for the AI era that we're in. I covered this story Wednesday night, but the last two days have been some developments and not all positive. But ultimately, the demand for the IPO wasn't there at the original deal size. It didn't mean they didn't get the deal done, though. Yesterday, we cut the offer size from 49 million shares to 37.5 million shares, lowered the deal price to $40. In order to get the deal done, they ultimately raised $1.5 billion rather than $2.5 billion. But hey, at least they got it done, especially after today's devolved into just another brutal tech led sell off. Shortly after 1 p.m. stock opened, trading at $39 below the offer price of 40, did touch $37.50, but then bounced back to close exactly at the offer price, $40. So it was a tepid debut, an opportunity for you? It's a good reason why Wall Street lacked the enthusiasm at the higher price. How about we go straight to the source? We find out. Joining with Mike Schroeder. He's the co-founder and chairman and CEO of CoreWeave. Hey, Mike, thank you so much for coming on the show and congratulations on the IPO.
Thank you so much. Today has been such an amazing day for us. I appreciate the opportunity to talk with you.
All right. So Mike, there are a lot of people joking around today. They're saying did did in trader in those boys at CoreWeave caused the problem in the market or was the market the reason why CoreWeave stock didn't shoot up higher? But you know what? Let's talk about the fact that ten days ago this market was hot, hot, hot. And then today people think it's cold, cold, cold. The truth is that's just not the way it is at all, is it?
No. Listen. Look. It was a really tough tape today. It's been a tough tape for the last couple of weeks here. There's headwinds on the whole market and there's definitely headwinds in the AI space. But look, stock comes out. It trades pretty tough. Kind of ends up where we offered it. I feel like we did a good job. The banks did a good job kind of downsizing the offering and getting the price right so that we can come out into this market. And you hit it dead right. Like for us, the key to this was getting out, getting into the public markets, offering our stock and having the ability to be a public company because that is transformative for our company.
I tell you, one of the things that occurred to me all week actually, was we're used to tech companies coming out with no debt. Why? Because the venture capitalists take stock. This did not come out that way. So a lot of the tech people said, My God, this has a lot of debt. In reality, the way you want to be able to do your business is to buy all the Nvidia GPUs you can do and get that first mover advantage. And if you didn't take any debt down, where would your company be?
Yeah, look, the debt is the engine. It's the fuel for this company, right? We go out, we find great contracts with great counterparties that need massive scale computing to drive their business. And then we go ahead and we go back to our syndicate of lenders, and they give us the debt to stand up the clusters that will deliver revenue to the company. It really is matched. Whenever you see debt on our balance sheet, you're going to see an offsetting revenue contract that is larger.
Right now. There are a lot of people today who were saying, well, wait a second. These things depreciate rather quickly. And didn't Jensen Huang himself say in his keynote that he sure hopes that nobody buys the Grace Blackwell when the Vera Rubin comes in? There was a lot of joking about that, and I think people didn't realize that it actually was said in jest, because in fact, the Grace Blackwells will be worth something even two years from now. True.
Yeah, absolutely. You know, he made the joke that he was the chief revenue destroyer, and I almost fell out of my seat. But look, you know, at the end of the day, there's the narrative that was out there that these things depreciate so fast and will be supplanted by the next generation. But in truth, what we see from the contracts that we are actually able to execute, like the just under $12 billion contract that we executed with OpenAI last week, they executed that contract for five years with two one year extensions. So it is a clear articulation by people who are putting up the money that are buying these contracts, that they believe that this infrastructure will have retained value far into the future. And, you know, those same buyers will come back, they will buy new infrastructure that is the most cutting edge for their next models. And then they'll take this earlier infrastructure and use it for other use cases in their company that requires really large bulk compute.
Excellent. Okay. So Mike, a week ago people were saying, wow, Nvidia really likes these guys. It's terrific. They have position. And the narrative changed. Today was like, oh my God Nvidia's propping this thing up. I mean they're way too close. They are way too close. So again something in between.
Yeah. Look, you know, people are going to put out whatever narrative they want at the end of the day. Nvidia has been an incredible partner for us and we have been an incredible partner for them. We build fantastic infrastructure. We bring it to the market in its most performant configuration. We're able to deliver it quickly. We have wonderful software that allows people to use it to be able to drive their models. They understand our business deeply, they understand the debt in our business deeply, and they believe that it is a fantastic way about going and scaling infrastructure for all of these new consumers as the world goes through this AI revolution.
And I found myself defending your company, I went out to one of your really beautiful, I got to tell you, I mean, incredibly hot, yes, but in actual hot reality data centers. And one of the things that people are really caught up in is the idea that two people, Joe Tsai, and then Joe Tsai, said something about maybe bubble, and then Microsoft actually didn't play. It's not really clear what they did, but backed away from buying even more. Those two somehow made people feel like that. This whole operation is completely overvalued and the Emperor has no clothes. Again, I wonder whether the zeitgeist of the stock market didn't interfere with a company whose product is so far in demand with a moat that no one else can deliver because they don't know how to do what you do. And that was totally obscure today and yesterday.
