CoreWeave Rebounds 5% After 8.3% Slide as $50 Billion AI Debt Fuels Default Fears
Updated
Updated · Reuters · Oct 15
CoreWeave Rebounds 5% After 8.3% Slide as $50 Billion AI Debt Fuels Default Fears
3 articles · Updated · Reuters · Oct 15
Summary
CoreWeave shares turned up 5% on Thursday after falling as much as 8.3% to their lowest since May 2025, extending a selloff that has become a flashpoint for worries over AI's debt-funded expansion.
About $50 billion of debt sits behind the Nvidia-backed cloud provider, while credit-default insurance has climbed to roughly 1,000 basis points—implying a nearly 63% five-year default probability despite Nvidia's capacity backstop through April 2032.
Its April bonds traded around a 15% yield and 79.15 cents on the dollar, while put-option volume hit a record high as traders bet on further declines below $60, $50 and $42.50.
Jensen Huang said CoreWeave's financial strength is improving and its cost of capital is falling, but Gartner warned 80% of neoclouds could shut by 2030 if AI revenue fails to justify spending.
The pressure reaches beyond one company: chip stocks have shed more than $1.6 trillion in six sessions as investors question whether more than $700 billion of annual AI spending can generate adequate returns.