Magnetar Capital has withdrawn from CoreWeave's critical $5 billion financing deal, intended for AI data center expansion, marking the second major investor departure and signaling potential hurdles for large-scale AI infrastructure funding.
CoreWeave's $5 Billion Data Center Deal Suffers Another Investor Blow as Magnetar Capital Exits
In a significant setback for AI cloud provider CoreWeave, Magnetar Capital has reportedly withdrawn its participation from a crucial $5 billion financing deal aimed at funding the company's ambitious data center expansion. This marks the second high-profile investor departure from the deal, following BlackRock's exit in April, raising questions about the stability and structure of large-scale infrastructure investments in the rapidly evolving AI sector.
The Ambitious Expansion at Stake
The $5 billion debt facility was designed to fuel CoreWeave's aggressive growth, enabling the construction of new, specialized data centers required to meet the exploding demand for GPU-intensive computing resources. As a key provider of cloud infrastructure for AI startups, CoreWeave's ability to scale is critical for both its own market position and the broader AI ecosystem. The financing was notably structured, leveraging CoreWeave's vast inventory of NVIDIA GPUs as collateral.
Magnetar Capital had emerged as a potential anchor investor after BlackRock's initial withdrawal. The repeated exits suggest potential challenges in structuring such a massive deal, especially one relying on a rapidly appreciating, yet potentially volatile, asset like GPUs for collateral. Sources familiar with the matter indicate concerns over the deal's complexity and specific terms may have contributed to the investor reticence.
Why This Matters for the AI Industry
The investor withdrawals could slow CoreWeave's expansion plans, potentially impacting the availability of critical AI infrastructure for startups and larger enterprises reliant on its specialized cloud services. More broadly, this situation highlights the evolving risk appetite and due diligence required for financing the staggering capital expenditures needed to power the AI revolution. While demand for GPU capacity remains insatiable, the financial mechanisms to build out that capacity are undergoing intense scrutiny. This event underscores the complexities of investing in high-growth, asset-heavy AI infrastructure, where traditional financing models are being tested and adapted.
“The demand for AI infrastructure is insatiable, and we are laser-focused on continuing to expand our capabilities to meet this unprecedented need.”
— Michael Intrator, CEO of CoreWeave
