CoreWeave (CRWV) stock fell as much as 15% in morning trading on Wednesday, a day after a chart of its rising borrowing costs gained traction on X .
On Tuesday, venture capitalist Chamath Palihapitiya posted a chart showing that the yield on $1.25 billion of CoreWeave bonds due in 2032 “touched 15% today, then closed at a new high” of 14.5%.
“Is the AI buildout creating a private credit bubble?” Palihapitiya asked.
Musk, who owns the platform, replied with one word: “Yikes.”
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As of 12:15:37 PM EDT. Market Open.
A bond’s yield rises as its price falls, so a yield near 15% means investors want a steep return to lend CoreWeave money.
The selling spread to other AI cloud stocks. Nebius (NBIS) fell around 10%, and Oracle (ORCL) dropped another 7%.
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As of 12:15:37 PM EDT. Market Open.
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CoreWeave rents out Nvidia (NVDA) chips to AI companies and pays for much of that hardware with debt. The company’s interest expense rose to $640 million in the second quarter from $267 million a year earlier, and it lost $626 million in the quarter, according to Yahoo Finance data. Revenue more than doubled over the same stretch to $2.58 billion.
Total debt reached about $52 billion at the end of June, up from about $15 billion a year earlier.
The company is clearly looking for cheaper money. CoreWeave is chasing insurers’ vast pools of capital to fund its build-out, the Financial Times reported Wednesday.
Co-founder Brannin McBee, who leads CoreWeave’s financing, told the FT that investment-grade ratings on more of its chip-backed debt would let it borrow from insurers, whose capital “is unlimited. Like, that’s all the money in the world that sits in the insurance tranche.”
McBee said CoreWeave will keep taking out chip-backed loans: “I don’t look at that as scary debt at all. I look at that as accelerating debt and great debt.”
Not everyone is convinced. If the AI spending boom turns, “the equity value is going to be zero,” D.A. Davidson analyst Gil Luria said on the Prof G Markets podcast. Luria, who rates the stock Neutral with a $100 price target, estimates that CoreWeave borrows at around 9% and earns about 1% on its investments.
If it closes near these levels, Wednesday would be CoreWeave’s lowest close since July 29. The stock is down about 56% from its 52-week high of $150, set on Oct. 16, 2025, and down about 7% this year.
In September, CoreWeave CEO Michael Intrator told Yahoo Finance that local pushback against data centers won’t slow AI demand: “The demand for compute will not be altered by a jurisdiction saying you’re not allowed to build data centers here.”