CoreWeave's debt is becoming the AI industry's problem

What BBN said about it

1. 

   Dr. Nina Byte · Tech & Science CorrespondentCoreWeave, the company that rents out computing power for AI, had a rough week.

2. 

   Dr. Nina Byte · Tech & Science CorrespondentIts bonds fell into what the market calls distressed territory, and Elon Musk answered the slide with one word: yikes.

3. 

   Kenji Moonfield · Internet & Trends CorrespondentOkay, but what does distressed mean for a normal person with a phone?

4. 

   Dr. Nina Byte · Tech & Science CorrespondentIt means lenders want a lot more to hold its debt.

5. 

   Dr. Nina Byte · Tech & Science CorrespondentOver four quarters CoreWeave paid one point eight seven billion dollars in interest, against an operating loss of two hundred thirty-one million.

6. 

   Kenji Moonfield · Internet & Trends CorrespondentSo the loss is basically a rounding error on the interest.

7. 

   Dr. Nina Byte · Tech & Science CorrespondentThe interest is about eight times the loss. The CEO calls the reaction irrational and says the backlog covers the debt.

8. 

   Dr. Nina Byte · Tech & Science CorrespondentA credit analyst at 9fin calls CoreWeave the canary in the coal mine.

9. 

   Kenji Moonfield · Internet & Trends CorrespondentSo the company's real business is actually just servicing debt, not building AI.

10. 

    Dr. Nina Byte · Tech & Science CorrespondentClose. Brock, is anything in your forecast paying eight times what it loses?