THE AI BOOM'S MONEY FURNACE IS BURNING — $50B-DEBT COREWEAVE HITS DISTRESSED, BONDS YIELD 16%

CoreWeave, the loss-making cloud company financing much of the AI build-out with debt, has about $50 billion in debt according to LSEG data compiled by Reuters, and has never turned a profit. Yields on its junk-rated bonds due in 2031 spiked to about 16 percent, while the cost of insuring its debt against default climbed to about 1,000 basis points, reflecting growing concern among creditors. Analysts expect revenue of nearly $13 billion this year against a loss of about $2.13 billion.

Reuters described CoreWeave as a possible canary in the coal mine for the AI boom, because its business depends both on demand for AI computing and on lenders' willingness to keep financing the infrastructure. CEO Mike Intrator told employees its deal backlog more than covers its obligations, citing a $104.2 billion revenue backlog at the end of the second quarter plus more than $25 billion in new commitments. Nvidia CEO Jensen Huang also downplayed concerns, saying CoreWeave's financial strength is improving.