Oct 17, 2026 · 5 min · 9 segments
Reuters reported on October 15 that CoreWeave, the Nvidia-backed company that rents AI chips to Microsoft and OpenAI, has about $50 billion in debt, has never turned a profit, and saw its junk bond…
16% is what a lender charges when it is not sure it gets paid back.
And this is a company that has never turned a profit.
Yet the week did not start with an earnings report.
Whose chart? The venture investor Chamath Palihapitiya posted a graph on Tuesday of CoreWeave's bond yields climbing and asked whether the AI build-out was inflating a lending bubble.
Yikes.
The stock fell 15.5% on Wednesday, and the selling spread to the other companies that borrow to rent out chips.
Those are good tenants, so why would anyone panic? Nobody is questioning the tenants.
Gavin Nolan at the ratings firm S&P Global told CNBC, "...the demand is real, since the contracts are with the biggest cloud companies, and the open question is whether the cash actually arrives." CoreWeave plans to spend far more this year than it takes in, and analysts expect it to lose money doing it.
So where does it get the next round of
money?
Its co-founder, Brannon McBee, told the Financial Times the plan is to earn an investment-grade rating, the stamp that lets insurance companies lend, because insurers' capital, in his words, is unlimited.
Insurance companies? As in my life insurance? As in the pool of money that pays out your policy or your annuity decades from now.
He wants it lending against chips, and he said so the same week the bond market decided the chips were not safe enough.
16% is what a lender charges when it is not sure it gets paid back.
And this is a company that has never turned a profit.
Yet the week did not start with an earnings report.
Whose chart? The venture investor Chamath Palihapitiya posted a graph on Tuesday of CoreWeave's bond yields climbing and asked whether the AI build-out was inflating a lending bubble.
Yikes.
The stock fell 15.5% on Wednesday, and the selling spread to the other companies that borrow to rent out chips.
Those are good tenants, so why would anyone panic? Nobody is questioning the tenants.
Gavin Nolan at the ratings firm S&P Global told CNBC, "...the demand is real, since the contracts are with the biggest cloud companies, and the open question is whether the cash actually arrives." CoreWeave plans to spend far more this year than it takes in, and analysts expect it to lose money doing it.
So where does it get the next round of
money?
Its co-founder, Brannon McBee, told the Financial Times the plan is to earn an investment-grade rating, the stamp that lets insurance companies lend, because insurers' capital, in his words, is unlimited.
Insurance companies? As in my life insurance? As in the pool of money that pays out your policy or your annuity decades from now.
He wants it lending against chips, and he said so the same week the bond market decided the chips were not safe enough.
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