CoreWeave's AI bubble fears expose neocloud debt risks

Loss-making US cloud company CoreWeave became a target this week for investors worried about an AI bubble, with its shares falling over 15% and bond yields spiking, signaling broader market concerns beyond its size. The Nvidia-backed firm, valued at $39 billion, carries $50 billion in debt and has never turned a profit. Its selloff followed hyperscaler reports hinting at data center delays and slower capital expenditure growth, raising fears about neoclouds' heavy borrowing for future income. CoreWeave's CEO defended its $104.2 billion revenue backlog, but analysts note cash burn is accelerating, with capital expenditure expected to quadruple this year. Hedge funds are betting against its bonds, and Gartner predicts 80% of neocloud providers will cease independent operations by 2030.