Nvidia-backed startup raises $2.3B in debt backed by Nvidia chips
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CoreWeave, a cloud service startup backed by Nvidia (NASDAQ:NVDA) announced on Thursday that it has raised $2.3B in debt that is backed by Nvidia's artificial intelligence chips.
In a statement, CoreWeave, based in Roseland, N.J. said it has raised $2.3B from investors including Magnetar Capital and Blackstone (BX). Participation in the debt offering also includes Coatue and DigitalBridge Credit, BlackRock (BLK), PIMCO and Carlyle.
While startups raising debt is nothing new, the company is using Nvidia's H100 graphics processing units, or GPUs, which were unveiled last year and are used to power large language models for generative AI, among other use cases, as collateral. 
"We negotiated with them [the lenders] to find a schedule for how much collateral to go into it, what the depreciation schedule was going to be versus the payoff schedule," CoreWeave CEO Michael Intrator told Reuters. 
"For us to go out and to borrow money against the asset base is a very cost effective way to access the debt markets."
In April, it was reported that Nvidia's (NVDA) H100 have sold for more than $40,000 on eBay, a significant premium to the $36,550 that the H100 went on sale for last year.
CoreWeave aims to use the funds to buy more GPUs and continue to build out its data centers and hiring.
Last month, Coreweave announced a $1.6B data center in Plano, Texas. It expects to have 14 data centers by the end of this year. 
In April, the company raised $221M in Series B funding, with Nvidia (NVDA) as one of the investors.