How CoreWeave Seduced the Bond Market

<p>CoreWeave’s shares are up 55% this month, but that rally tells just part of the story about the AI cloud provider. The company has tapped a range of sources for much-needed capital, giving it a commanding role in the AI build-out.&nbsp;</p><p>CoreWeave’s big fundraising haul—totaling nearly $16 billion—also signals that both stock and debt investors are now going all in on data centers, power, chips and everything AI related.&nbsp;</p><p>Surging demand for AI computing power has turned normally cautious bond investors into enthusiastic AI backers. Meanwhile, companies that want computing power for themselves are willing to write big checks up front to guarantee access. “We’re more in the period of belief than skepticism,” said Nick Robbins, CoreWeave’s vice president of corporate development.</p><p>Brace yourselves: These trends are likely to get stronger, at least in the near term. They could also cause a financial hangover if demand for AI falls short or the build-out suffers big delays. Stocks can gyrate with little impact on the economy, but if turmoil hits the bond market, lenders can get nervous and slow the growth of credit, hitting the economy. If we get big losses down the road, they could ricochet around the financial system.&nbsp;</p><p>As I <a href="https://www.theinformation.com/newsletters/the-information-finance/bull-case-ai-just-got-stronger">wrote last month,</a> improvements in AI have caused a scramble for computing power. That has bolstered the case for expanding the data centers that provide it. For companies looking for computing power, CoreWeave has shown it can deliver. For investors, CoreWeave provides a&nbsp; highly leveraged bet on the success of AI.</p><p>CoreWeave seized on the bullish sentiment. On March 31, the company <a href="https://www.theinformation.com/briefings/coreweave-raise-8-5-billion-chip-backed-debt">closed an $8.5 billion borrowing facility</a> ultimately backed by Nvidia graphics processing units it owns. Then on Apri