CoreWeave's debt troubles expose risks in the AI data center boom

CoreWeave, an AI cloud company with about $50 billion in debt, saw its shares and bonds tumble Thursday amid growing investor fears that the data center boom is fueled by borrowed money, straining even major tech firms. The Nvidia-backed company's stock fell 6% in premarket trading after a 15% drop Wednesday, with bond yields surging past 16% and default probability rising to nearly 63% within five years. Analysts question whether AI revenue can match the massive spending driving industry expansion. CoreWeave, which went public in March 2025, is among "neoclouds" that borrow heavily to buy Nvidia processors. Research firm Gartner predicts about 80% of neoclouds could shut down by 2030, with over $3.5 trillion in AI infrastructure spending potentially impaired.