CoreWeave’s Debt Insurance Costs Hit a Record as AI Expansion Strains Finances

CoreWeave's credit default swap spread hit a record 1,038 basis points on Thursday, up 164% year over year, signaling investor concern about a potential default on its roughly $51 billion in debt and lease obligations. The company, a leading AI cloud provider, posted a net loss of $626 million last quarter and negative free cash flow of $5.7 billion due to $6.4 billion in capital spending. Rising insurance costs could make future borrowing or refinancing more expensive, increasing default risk. Despite the financial strain, CoreWeave's revenue more than doubled to $2.58 billion last quarter, with a $104 billion revenue backlog. However, its growth model depends on continuous external funding, leaving little room for error if borrowing costs escalate further.