CoreWeave Shares Plunge on AI Debt Concerns

CoreWeave shares and bonds tumbled amid concerns that its debt-funded AI data-center expansion may not generate returns fast enough to cover borrowing costs. The company has about $50 billion to $52 billion in debt and lease obligations, rising interest expenses, and bond yields at distressed levels; it has authorized sales of up to 35 million shares and launched a $3 billion convertible-notes offering due in 2033, while also seeking lower-cost financing. Investors are weighing risks including chip obsolescence and slowing AI investment, and Gartner warned that many neocloud providers could fail or consolidate by 2030. CoreWeave points to a large contract backlog, while Nvidia CEO Jensen Huang and some analysts expressed confidence in the company; other analysts have warned that a downturn in AI spending could severely damage its equity. The selloff also weighed on Nebius and broader AI-related stocks, and upcoming cloud-provider results and CoreWeave’s ability to refinance debt and generate cash flow are key tests for investor confidence.