Shares in the AI “neocloud” provider CoreWeave fell 15.46% on Wednesday, and fell a further 5.62% in post-market trading, after venture capitalist Chamath Palihapitiya posted on X a chart showing the yield on CoreWeave’s bonds touching 15%. That’s an indicator investors were demanding a steep premium for holding its debt. “Is the AI build-out creating a private credit bubble?” Palihapitiya asked. (The stock recovered a little on Thursday.)
At the same time, the Financial Times published an interview with CoreWeave cofounder and finance lead Brannin McBee in which he said he wanted to borrow even more money—from insurance companies. The insurance sector’s access to capital “is unlimited,” he told the paper. “Like, that’s all the money in the world that sits in the insurance tranche.”
CoreWeave’s vast debt pile has been a subject of controversy in the past. In 2025, a Fortune analysis of its financials concluded that the company had the potential to be “ground-zero for a future AI financial meltdown.”
Debt owed by AI service companies also made headlines recently when Oracle issued a “force majeure” citation to Blue Owl, the developer of a massive data center in New Mexico, over worries that the site won’t be finished in 2028, when it is scheduled to come online—an indicator that customers might have the legal ability to walk away from their commitments if the weather changes against them. And Gartner estimates that 80% of neocloud providers will cease independent operations by 2030 because their revenues won’t cover their outgoings.
