CoreWeave Bonds Fall Below 80 Cents as AI Data Center Debt Sells Off

Bond prices tied to U.S. AI data center projects have fallen as investors question whether future revenue can support heavy borrowing, with CoreWeave debt slipping below 80 cents on the dollar.

Some bonds financing data center construction for Meta, Nvidia and Oracle have dropped below face value. CoreWeave’s bonds fell to less than 80 cents per $1 of face value, and their yield approached 15% Thursday, a level commonly associated with distressed debt.

CoreWeave shares lost 17% this week, while rival Nebius fell 18%. Nvidia’s market value declined by about $270 billion over the past week.

Investors are weighing the cost of AI infrastructure against revenue from AI services. OpenAI’s IPO delay until next year and slower quarterly sales growth at Anthropic have added to doubts about how quickly that business can expand. Investors are also wary of financing arrangements in which customers and suppliers fund one another.

Allianz Chief Investment Officer Ludovic Subran said weaker data center projects face a survival test. He linked wider credit spreads to power constraints and construction delays, and said markets had previously underestimated the risks involved in completing projects.

Some U.S. regions are tightening restrictions over data centers’ water use, noise and air pollution, while power supply approvals are also slowing projects. Nvidia Chief Executive 黄仁勋 said Thursday that CoreWeave did not need a financial backstop from Nvidia, adding that CoreWeave’s capital costs were declining and its operations were improving.

AI data center owners may need $8.5 trillion in revenue by the end of 2030 to cover capital and financing costs and earn reasonable returns. Consumer and business spending on AI services may reach no more than $3.6 trillion by then, while more than $4 trillion in assets could face impairment by 2032. As many as 80% of new cloud service providers may not remain independent by 2030.