CoreWeave’s bonds are flashing distress—and testing the AI infrastructure boom

CoreWeave, which rents out the chips and data-center capacity used to train and run AI models, saw its bonds fall and the cost of insuring its debt against default reach a record. Yields on some bonds topped 15%, while prices for that insurance implied roughly a 60% chance of default within five years—a market signal, not a forecast that the company will fail. The concern is straightforward: it must spend heavily upfront on chips and facilities, then turn long-term customer contracts into cash fast enough to service borrowing and fund more expansion. CoreWeave points to a large contracted backlog, but the sell-off in debt issued by other AI infrastructure borrowers shows investors no longer treat future AI demand as proof that highly leveraged projects will pay for themselves.