By Arsheeya Bajwa and Krystal Hu

Nov 13 (Reuters) -

AI cloud platform operator CoreWeave said on Wednesday it

closed a $650 million secondary share sale to investors, a deal

that a source familiar with the matter said more than tripled

the company's valuation over the past year to $23 billion.

The investors were led by Jane Street, Magnetar,

Fidelity Management and Macquarie Capital, and the higher

valuation illustrated growing interest in the business of cloud

infrastructure for generative artificial intelligence.

CoreWeave provides access to data centers and

high-powered chips for AI workloads, mainly from its backer and

AI bellwether Nvidia ( NVDA ).

In the secondary stock sale, existing investors sold

their holdings to new investors. The source familiar with the

matter said the $23 billion valuation was up from $7 billion

about a year ago.

CoreWeave was valued at $19 billion in May after a $1.1

billion Series C investment led by private equity firm Coatue, a

source said at that time.

The secondary sale demonstrates Wall Street investors'

interest in taking stakes in hot AI companies before they go

public. CoreWeave is considered a candidate for an IPO next

year.

Demand for services like CoreWeave's, which make

increasingly sophisticated generative AI applications possible

at scale, has sky-rocketed since the launch of OpenAI's ChatGPT

in late 2022.

CoreWeave competes against cloud computing service providers

such as tech giant Microsoft's ( MSFT ) Azure and Amazon's ( AMZN )

AWS.

New Jersey-based CoreWeave said investors in the latest

stock sale included Cisco Investments, Pure Storage ( PSTG )

, BlackRock ( BLK ), Coatue, Neuberger Berman and

others.

Morgan Stanley ( MS ) and Goldman Sachs ( GS ) advised CoreWeave.

Funding for private AI and cloud companies in the U.S.,

Europe and Israel is rising after three years of decline, and

the 2024 amount is estimated to hit $79.2 billion by the end of

the year, venture capital firm Accel said in October.