The AI cloud provider Coreweave fell 15 percent on Wednesday after rising bond yields increased concerns about the AI infrastructure company’s financing. Sector peer Nebius also fell 10 percent.
Venture capitalist Chamath Palihapitiya noted that the yield on Coreweave’s $1.25 billion in unsecured bonds maturing in 2032 had risen to nearly 15 percent, and ended Tuesday at a record-high 14.5 percent. Elon Musk responded to the post with “Yikes”, Investing.com notes.
Coreweave has raised more than $35 billion in financing this year through, among other things, loans, bonds and share sales. At the end of June, debt and lease obligations amounted to around $52 billion, according to the Financial Times. Higher financing costs have increased investor concerns about the capital-intensive expansion of AI infrastructure.
