CoreWeave, the Nvidia-backed AI infrastructure company, has reduced the size of its US initial public offering (IPO) and priced its shares below the initial range, raising concerns over investor interest in AI infrastructure.

The company will offer 37.5 million shares, 23.5% fewer than originally planned, with shares priced at$40 each, well below the lower end of the expected price range.

Despite strong backing from Nvidia, which committed to a$250 million order, the IPO has faced a tepid reception due to concerns about CoreWeave's long-term growth and capital-intensive business model.

Investors have expressed worries over the company's reliance on Microsoft's shifting AI strategy, which could affect demand for its GPU chips. Additionally, CoreWeave's high debt levels and lack of profitability have raised doubts about its financial sustainability.

The reduced IPO comes at a time when the US IPO market is struggling, with fewer equity deals and lower transaction values in 2024 compared to last year.

CoreWeave's stock market debut, once seen as a test for the AI infrastructure market, now signals waning investor confidence in AI companies, especially those without a proven profit history.