CoreWeave shares fall amid rising bond yields due to concerns over AI-related debt
Shares of CoreWeave dropped nearly 16% as investors grew concerned about the company's heavy borrowing for artificial intelligence infrastructure. Yields on its bonds surged, with one maturing in 2032 reaching close to 15%. This shift reflects growing unease among investors over whether tech firms are taking on unsustainable debt levels to fund AI expansion. Chamath Palihapitiya highlighted the rising bond yields on X, prompting a reaction from Elon Musk. Analysts suggest that easy money conditions have started fading and lenders now demand higher risk compensation for financing AI projects. Oracle also saw its shares fall nearly 7%, with similar trends in its debt market. The broader tech sector was hit hard as investors focused more attention on financial risks outside the dominant "Magnificent Seven" stocks, dragging down the Nasdaq Composite by over 1%. JPMorgan estimates hyperscalers will spend $800 billion this year on AI infrastructure.