Yields on a key cloud provider’s bonds rose further, one of a number of signs of investors souring on AI infrastructure investment. The cost to insure CoreWeave’s bonds has also risen 150% from a year ago, while its stock at one point fell 28% this week.
It is not the only firm investors are worried about, either: Oracle’s $160 billion debt is rated just above junk status, and Microsoft’s AAA-rated debt costs 25% more to insure than three months ago. Ultimately, AI “is probably the most consequential change to the … economy in my lifetime,” Federal Reserve chair Kevin Warsh said. But “the path from where we are to there is likely to be a bumpy one.”
— Prashant Rao