CoreWeave bonds hit 15% yield as AI debt rout triggers a 'Darwin moment' for data centre financing

Investors are fleeing AI infrastructure debt after CoreWeave's bonds — issued in June at a yield of 9.675% — surged to 15% this week, signalling distressed territory and sparking a broader sell-off across tech stocks globally. Analysts are warning the rout marks a turning point for the entire AI buildout, as markets question whether data centre projects can generate returns fast enough to justify their colossal borrowing. CoreWeave carries around $50 billion in debt and its shares fell more than 15% through Thursday, dragging down Nebius, Iren, Dell and Hewlett Packard Enterprise with it. Nvidia CEO Jensen Huang defended CoreWeave in Stockholm, insisting its 'financial strength is improving every day' and ruling out a Nvidia bailout.

Max Frumes of credit analytics firm 9fin called CoreWeave 'the canary in the coal mine', warning other AI-linked debt will follow it into distressed territory.

Bond yields on CoreWeave's April 2031 notes briefly surged above 16%, prompting portfolio managers to say they are now 'taking another look' at all AI infrastructure exposure.

Asian stocks bounced Friday and CoreWeave shares clawed back some ground, but analysts warn tech earnings season could trigger a 'protracted period' of volatility.