Former L Brands CEO Les Wexner’s initial $1 million investment in CoreWeave has turned into a $720 million stake in the artificial intelligence cloud company valued at over $19 billion.
Associated Press
Les Wexner, the Victoria’s Secret billionaire who stepped down from his company L Brands in 2020 amid scrutiny of his ties to convicted sex offender Jeffrey Epstein, is cashing in on the rise of artificial intelligence.
Thanks to an initial $1 million investment in Atlantic Crypto, a little-known company that would become artificial intelligence cloud controller CoreWeave, the 86-year-old’s family trust now holds a $720 million stake in one of the startups. most valuable AI. The Ohio-based billionaire is one of America’s richest men, worth an estimated $6.3 billion.
Wexner’s massive stake in the $19 billion startup was revealed in a lawsuit filed in the United States District Court for the Southern District of New York in May 2024 by wealth management firm Florence Capital Advisors. The New York-based money manager claims it was entitled to a $6.9 million fee for advising Wexner’s family trust to invest in startups in 2019.
CoreWeave, which provides access to the highly coveted chips used in building AI models, is among the most highly regarded AI startups to emerge from the integration of artificial intelligence. It raised $7.5 billion in debt from Blackstone in May and $1.1 billion in equity earlier this year to build a massive network of data centers that provides the computing power needed to train AI. But in 2019, it was a struggling cryptocurrency miner who had just started renting out his graphics chips to AI startups out of a garage in New Jersey.
CoreWeave raised $1.2 million in a seed round in March 2019, according to Pitchbook data. Wexner’s money manager Greg Hersch of Florence Capital then invested $1 million, later received another $600,000 in stock from the company’s Series A round and doubled again through an additional convertible note. All of this was placed in a trust set up for the benefit of Wexner’s four children: Sarah, Hannah, David and Harry.
Now, those investments have evolved into a $720 million stake in the AI startup rumored to seek an initial public offering next year — and a legal wrangle over what appears to be an accidental initial public offering.
The tussle is a rat’s nest of New York finance involving a father-son duo brought in to manage Wexner’s money after Jeffrey Epstein allegedly stole $46 million from his family’s trusts, a separate stake of $100 million in CoreWeave, made by a bankrupt hedge fund, charges. of double dipping and the mysterious disappearance of files containing data on the billionaire’s finances.
Florence Capital denies all this and insists it is owed a fee for an investment tip that generated “an almost unimaginable 30.986% return” when Wexner sold $71 million of CoreWeave stock in November 2023. That sale, combined with the stock remaining rated Wexner at CoreWeave. making the total investment windfall just under $800 million.
Wexner, Florence Capital and CoreWeave did not respond to a request for comment.
Wexner’s investment in CoreWeave coincided with a bet on data centers increasingly riding the wave of AI. As of 2019, he has sold over $450 million of land around his home in New Albany, Ohio and neighboring Licking County to tech giants like Google, Meta and Facebook, and Wall Street powers like Blackstone, who have used him that of building massive data. the centers. With more than $15 billion in planned data center investments announced for Franklin and Licking counties alone over the past year, according to Washington, D.C.-based corporate subsidy tracker Good Jobs First, Wexner is positioned well for similar deals in the future. Through his real estate development firm, the New Albany Company, he still owns about $850 million worth of farmland in the area, according to Forbes’ assessments.
or Forbes investigation released in April outlined Wexner’s crucial behind-the-scenes role in bringing a $20 billion Intel chip manufacturing plant to New Albany. The suburb of Columbus, Ohio, was able to seal the deal with Intel in a competition with dozens of other states because the New Albany Company cobbled together a 1,000-acre block of “shovel-ready” farmland for what Intel hopes will be its largest factory. largest semiconductor in the world. . The billionaire earned about $35 million from this deal alone. It is in the process of building a 400-acre mixed-use development near the Intel site to house its suppliers and was still actively buying more land as of July 25.