CoreWeave default insurance tops 1,140 bps as AI debt fears deepen
Why it matters: A CDS spread above 1,000 basis points is widely seen as distress, raising pressure on heavily leveraged AI infrastructure bets.
CoreWeave’s credit stress worsened Thursday as the spread on its five-year credit default swaps briefly climbed above 1,140 basis points, a level markets often associate with distress. The AI cloud company has taken on more than $51 billion of debt and obligations to fund its infrastructure buildout. Its 9.75% bond due in 2031 reached a yield to maturity of 15.78%, signaling falling bond prices and rising concern about repayment risk. The move rippled across AI-linked stocks and debt as investors questioned whether cash flow will arrive fast enough to justify heavy capital spending on chips, data centers and computing capacity.