After Nvidia, Blogger Sounds Alarm on AI Giant

Jeffrey Emanuel, the former crypto executive and blogger who made waves earlier this year with his warning about Nvidia vulnerability to Chinese AI startup DeepSeek, is now cautioning investors about CoreWeave’s upcoming IPO.

Emanuel’s analysis on DeepSeek led to a $600 billion drop in Nvidia market value in a single day, garnering attention from Wall Street to Silicon Valley. Now, he is sounding the alarm on CoreWeave Inc., a New Jersey-based cloud services provider planning to go public.

While CoreWeave’s revenue surged 747% in 2024 by running AI data centers, Emanuel warns the company’s business model is fragile. Unlike competitors that own infrastructure, CoreWeave leases its data centers, creating financial risk if AI spending slows.

“CoreWeave could face a severe cash crunch if revenue growth stalls and lease obligations remain high,” Emanuel said, comparing it to WeWork’s collapse after unsustainable expansion.

CoreWeave plans to offer shares at $47 to $55, seeking to raise $2.5 billion with a market cap of around $25 billion. While lower than previous expectations, Emanuel believes the valuation remains inflated, arguing it should be closer to $3 billion.

Not all analysts share his view. Renaissance Capital’s Matthew Kennedy sees CoreWeave’s IPO as a major opportunity for investors wanting exposure to the AI infrastructure boom.

However, Emanuel raised concerns over CoreWeave’s dependence on Microsoft, which accounts for 62% of its revenue. Microsoft’s plans to invest $80 billion in its own AI data centers could reduce its reliance on CoreWeave.

“CoreWeave’s growth could suffer if Microsoft expands its infrastructure or AI demand falters,” warned D.A. Davidson analyst Alexander Pratt.

Additionally, Emanuel questioned CoreWeave’s claims of proprietary AI management software, stating that comparable open-source solutions are available. He also expressed skepticism over CoreWeave’s recent $11.9 billion contract with OpenAI, citing a lack of transparency on financial terms.

In 2024, CoreWeave’s revenue reached $1.9 billion, up from $229 million in 2023, but its losses also widened to $863 million. The company’s prospectus outlines significant risks, including its reliance on a few major customers and the need to stay competitive in a rapidly evolving market.

While Emanuel holds no financial position in CoreWeave, he hopes his warnings will help retail investors avoid overvalued stocks. “This IPO is a clear attempt to capitalize on AI hype,” he concluded. “Investors should approach with caution.”