Musk warns over 200 AI cloud firms face mass failure as funding dries up

Elon Musk warned that more than 200 AI cloud companies face mass failure as debt markets have largely cut off funding for firms dependent on AI data centers, causing neocloud stocks to fall Monday. Neoclouds like CoreWeave and Nebius rent computing power for AI. Musk said debt markets have "almost entirely shut off access to money" for companies lacking substantial independent revenue, while noting SpaceX closed $40 billion in borrowing for GPU purchases, crediting its investment-grade rating and Starlink income. Shares of Nebius, CoreWeave, and Iren slid over 4% before recovering to 2-3% losses, with monthly drops exceeding 30% for CoreWeave and Nebius. Nvidia CEO Jensen Huang said demand is "off the charts" but working capital is missing, while Nebius distanced itself from CoreWeave's debt burden.