CoreWeave Credit Default Swaps Hit Distress Levels as Investors Sour on AI Debt
Signs of distressed deepened in CoreWeave on Thursday.
TL;DR
- CoreWeave has accumulated over $51 billion in debt and obligations for AI infrastructure.
- Investor concerns about AI overspending and debt levels are rising.
- Yields on CoreWeave's debt have increased, with its 2031 bonds yielding 15.78%.
- The spread on CoreWeave's five-year credit default swaps has surged, indicating increased perceived risk.
- Credit default swaps at or above 1,000 basis points suggest credit distress.
- CEO Mike Intrator dismissed market movements as irrational, citing a $100 billion backlog.
- Concerns about AI debt are spreading, impacting other 'neocloud' stocks and even Oracle's credit default swaps.