CoreWeave's $50 Billion Debt Load Rattled the AI Boom This Week: 16% Bond Yields, a 'Yikes' From Musk, and a Plan to Borrow 'Unlimited' Money From Your Life Insurer
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Reuters reported on October 15 that CoreWeave, the Nvidia-backed company that rents AI chips to Microsoft and OpenAI, has about $50 billion in debt, has never turned a profit, and saw its junk bond yields spike to about 16% while the cost of insuring its debt crossed the conventional distress line. A chart of those yields posted by Chamath Palihapitiya, with Elon Musk replying 'Yikes', set off a 15.5% one-day drop that spread to Oracle, Dell, AMD and the whole neocloud group; by Friday the Nasdaq had its worst week since June. Its co-founder told the Financial Times the plan is to win an investment-grade rating and tap insurers' 'unlimited' capital.
