From Crypto Roots to AI Selloff: Why CoreWeave Is Under Pressure

CoreWeave shares fell more than a third in October as investors balked at roughly $52 billion of debt the Nvidia-backed company took on for artificial intelligence data centers, despite second-quarter revenue rising 112% to about $2.5 billion. Founded as Ethereum miner Atlantic Crypto in 2017 and renamed CoreWeave in 2019, it now rents GPU computing power. Its unsecured bonds yield about 15%, and the spread on credit default swaps, which insure against default, passed 11%. Nvidia owns about 9% of CoreWeave and has committed to buy up to $6.3 billion of capacity; CEO Jensen Huang said on Oct. 15 that the chipmaker did not need to provide a financial backstop. CoreWeave stock had dropped 15% a day earlier.