CoreWeave bond rout tests investor appetite for AI buildout

A sharp decline in CoreWeave's bonds this week is testing investor willingness to finance AI infrastructure, as rising borrowing costs and scrutiny of debt-funded expansion hit the sector. The selloff may signal a broader reassessment of risks tied to AI projects that could take years to generate revenue. CoreWeave bonds issued in June at a 9.675% yield have plunged, pushing their yield to 15% this week. Analysts call CoreWeave the "canary in the coal mine," predicting more expensive credit, greater scrutiny, and potential investor pushback across AI-linked debt. Credit investors are becoming more selective, with some re-examining exposures and preferring secured vehicles. Others view the selloff as an overreaction, while analysts note rising inflation, political controversy over data centers, and estimates that 5% to 10% of planned projects may never be built.