AI debt fears drive CoreWeave shares and bonds lower

CoreWeave's debt

50 billion US$

Loss-making cloud firm CoreWeave carries about US$50 billion in debt, and its shares fell more than 15 per cent on Wednesday and another six per cent before trading opened on Thursday.

The insurance investors buy against a default

credit default swap

Insurance against CoreWeave defaulting on its debt now implies a 63 per cent chance it defaults within five years, up from about 30 per cent a year ago.

"Our research indicates enterprise and consumer AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures during this period."

— Will Sommer, Gartner analyst

Goldman Sachs CEO

Demand is uncertain

Citigroup CEO

Not enough compute

Goldman Sachs CEO David Solomon said no one knows how demand for capital and computing power will evolve, while Citigroup CEO Jane Fraser said there is simply not enough compute.

Economy · 19 d ago

AI debt fears drive CoreWeave shares and bonds lower

Loss-making cloud firm CoreWeave carries about US$50 billion in debt, and its shares fell more than 15 per cent on Wednesday and another six per cent before trading opened on Thursday.

Insurance against CoreWeave defaulting on its debt now implies a 63 per cent chance it defaults within five years, up from about 30 per cent a year ago.

"Our research indicates enterprise and consumer AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures during this period."

Goldman Sachs CEO David Solomon said no one knows how demand for capital and computing power will evolve, while Citigroup CEO Jane Fraser said there is simply not enough compute.

AI debt fears drive CoreWeave shares and bonds lower

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