CoreWeave shares and bonds slump on AI bubble fears, debt concerns

CoreWeave, the Nvidia-backed AI cloud company, saw its shares fall more than 15 per cent this week and its 2030 bond yields jump to nearly 16 per cent as investors worried about an AI bubble. The loss-making firm has US$50 billion in debt and has never turned a profit.

LONDON/BENGALURU: Loss-making and deeply indebted US cloud company CoreWeave became an easy target this week for investors concerned about an artificial intelligence bubble. Its selloff, though, has greater significance for markets than its size implies.

The slump in the shares and bonds of the US$39 billion Nvidia-backed AI infrastructure company came after third-quarter reports from hyperscalers hinted at delays in data center projects and a slower pace of growth in capital expenditure. Worried investors took aim at new-age AI-based cloud firms, or neoclouds, such as CoreWeave, conceivably the weakest links in the AI ecosystem because of how they borrow heavily to finance chips, land and energy for data centers which will yield income only in the future.

CoreWeave's shares dived more than 15 per cent this week while yields on its 2030 bonds jumped 500 basis points to near 16 per cent. CoreWeave chief Mike Intrator told employees in a memo, seen by Reuters, markets can sometimes