CoreWeave Credit Default Swaps Hit Distress Levels as Investors Sour on AI Debt

Signs of distressed deepened in CoreWeave on Thursday.

CoreWeave Credit Default Swaps Hit Distress Levels as Investors Sour on AI Debt

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.