Symbolic imageAI-debt fears grow as CoreWeave bonds slump and Elice falls in Seoul debut
CoreWeave's unsecured bonds sold off, and Korean data-centre firm Elice lost 32% on its first trading day on Tuesday.
Investors are questioning how the AI build-out is financed after CoreWeave's $2bn of unsecured bonds slumped, with Barclays citing a 15% yield. Barclays analyst Ajay Rajadhyaksha, quoted by the FT, argues the market is over-reading a single case: the notes rank below secured loans, convertibles and leases in a $35bn debt stack, so they say little about the whole AI investment cycle. He compares the episode to the 2023 collapse of Silicon Valley Bank, which triggered fears of rate cuts that never came. Secured financing remains available, but spreads on CoreWeave's recent loans have widened.
Elice's record flop
Bloomberg reports that Elice shares fell 32% in the company's Seoul debut. Handelsblatt calls it the worst stock-market debut in history, noting that demand had been strong beforehand and that the offering raised 201 billion won, about $150 million.
Demand for credit insurance
The FT reports that investors are racing to buy credit default swaps to protect portfolios in case the AI boom unravels, and describes the cheap contracts as a bellwether hedge for AI sentiment. Big Tech earnings reports begin this week.
Chinese tech giants keep buying
ByteDance, Alibaba and Tencent have ordered over $35bn of Nvidia chips.