In AI right now, no business makes more money than renting out computing power.

CoreWeave, holding thousands upon thousands of NVIDIA GPUs, has played landlord to Microsoft and OpenAI, winning more than $100 billion in mega-contracts and doubling its revenue in a single quarter.

Then, just as everyone assumed it could sit back and count the cash, the capital market — which answers to money, not reputations — abruptly turned on it and delivered a stinging slap.

Hundred-Billion-Dollar Giant Hounded by High-Interest Debt

CoreWeave's trouble surfaced first in the bond market, where it does its borrowing.

In mid-October 2026, yields on some of the company's unsecured bonds suddenly spiked to around 15%, and one note maturing in 2031 briefly pushed past 16%.

In the bond market, a higher yield means a higher cost of borrowing. An ordinary tech company pays a few percentage points; creditors now demanding upwards of 15% before they will take the paper shows Wall Street is quietly wondering whether the money it lends will ever come back.

Once creditors got nervous, equity investors could not sit still either.

On October 14, CoreWeave's stock fell about 15.5% in a single day and gave up a quarter of its value over the week. The slide dragged its peers down too: compute providers including Nebius and IREN fell alongside it, and even the Philadelphia Semiconductor Index, the benchmark for the entire chip sector, got caught in the downdraft.

To outsiders, the scene was baffling.

Not long ago, CoreWeave was the AI industry's brightest star. It holds contracts with top-tier buyers including Microsoft, OpenAI and Meta, and has publicly reported a backlog of unfulfilled orders totaling $104 billion. NVIDIA, the dominant force in chips, orbits the company: it is a shareholder, a GPU supplier, and a customer that leases CoreWeave's computing power. In the second quarter of this year, revenue surged 112% year over year to $2.575 billion.

More than $100 billion in orders on the books, revenue doubling, tech heavyweights standing behind it. How did a company riding this high suddenly get backed into a corner by its creditors?

Borrowing Against Depreciating GPUs

To understand why the creditors panicked, you first have to understand CoreWeave's wild playbook for turning GPUs into cash.

CoreWeave began life as an Ethereum crypto mining company, and its founders stockpiled a large fleet of GPUs. When the crypto mining bust collided with the ChatGPT boom, the cards once used for mining became, overnight, the most coveted asset of the AI era. Microsoft and OpenAI urgently needed computing power to train models and had no time to build facilities of their own. CoreWeave, with GPUs and data center space already in hand, became the place for the giants to spend money and buy time.

Riding that wave, CoreWeave pulled off its IPO in March 2025, with revenue climbing from $229 million in 2023 to $5.1 billion in 2025.

But building out computing capacity is a money pit. Buying eye-wateringly expensive chips, leasing large facilities, securing power — each demands hard cash upfront. The money CoreWeave raised could never keep pace with its GPU buying. Bank loans were closed off too, since the company was still losing money and held none of the hard assets, like land or buildings, that banks accept. Search it top to bottom and its most valuable possession was the NVIDIA GPUs racked in its data centers.

So the company came up with a trick: pledge the GPUs as collateral for loans.

In August 2023, CoreWeave brought in financial heavyweights including Blackstone and borrowed $2.3 billion against its chips. The deal effectively turned an electronic consumable that loses value by the day into a financial asset that could be pledged for cash again and again.

With that lock picked, a frenzied capital machine began to spin: buy a batch of GPUs, then use the GPUs and the big-customer contracts to borrow; put the borrowed money straight into more GPUs, then land bigger orders; with new orders in hand, borrow even more in the next round.

The approach let it latch onto the giants fast. In 2024 and 2025, Microsoft alone accounted for 62% and 67% of its revenue, respectively.

On the surface, that looks like landing a deep-pocketed patron. In the eyes of the shrewd tech giants, the math reads entirely differently. By leasing computing power, Microsoft and its peers secured the capacity they desperately needed while offloading the dirtiest, heaviest financial burdens — buying the GPUs, carrying the enormous loans, absorbing the equipment's depreciation — onto CoreWeave's books.

So what do the books actually look like at the company shouldering all of that for the giants?

Slow Money Can't Fill a Fast-Money Hole

Pry open CoreWeave's accounts and the biggest outside misconception becomes clear: people treat the headline contract value as cash sitting in its pocket, free to spend.

As of the end of June 2026, only about 41% of the $103.7 billion in formal contract orders CoreWeave has disclosed is expected to be delivered and recognized as revenue within the next two years. The contracts are real, but the money comes back drop by drop, month by month.

The spending, on the other hand, does not wait a second for anyone.

In the second quarter of this year, CoreWeave's net loss reached $626 million, more than double a year earlier. Net interest paid to service its debt alone came to $640 million in a single quarter.

The actual cash movements are more alarming still: the company brought in just $679 million of real cash from operations during the quarter, barely enough to cover interest. Yet it spent $6.422 billion in cash on GPUs and data center buildout — nearly ten times the cash it earned.

As of the end of June, total debt stood at $35.6 billion, with another $16.3 billion in long-term lease liabilities for data center equipment. Even with that debt pile, the company's full-year spending plan for chips and facilities still runs to $35 billion to $39 billion.

On one side, rent trickling in month by month. On the other, relentless interest bills and massive cash-upfront purchases of chips.

What makes it worse is that the GPUs it pledges for loans are nothing like a house that holds its value. A GPU starts aging the moment it is powered on. When NVIDIA rolls out a new generation in a couple of years, the older cards lose their appeal, and both rental rates and residual resale values fall. Once GPUs depreciate, the collateral is no longer worth what it was, and the safety cushion under creditors is punctured in an instant.

If the holes in the business model are this obvious, why did Wall Street keep lending it money year after year? And why the sudden change of heart now?

The Borrow-to-Repay Game Stalls

Wall Street dared to lend because its backers were convinced of one logic: as long as global AI computing power stayed scarce and the financing channel stayed open, CoreWeave would eventually grow its way to stable cash flow. To reassure the market, the company closed a loan facility of up to $8.5 billion in March this year.

Now the game of borrowing new money to repay the old has stalled.

With unsecured bond yields spiking above 15%, any new borrowing by CoreWeave will carry a frightening cost. High funding costs devour the already thin margins on computing projects. Weaker margins make the next round of borrowing harder still. What used to be a tailwind — buy chips, sign contracts, raise debt — becomes a fatal doom loop the moment it runs in reverse.

At precisely this pressure point on both stocks and bonds, heavy cashing-out by the company's founders has deepened investor unease. Since the March 2025 IPO, the three co-founders have sold roughly $3.3 billion of stock, including about $2.4 billion in 2026 alone. The company was quick to explain that the sales followed plans disclosed in advance under the rules, that the executives still hold about 20% of the shares, and that everything is fully legal and compliant. Still, with shares and bonds selling off together, a founding team pocketing billions ahead of everyone else is hard for creditors to swallow.

To save itself, CoreWeave is scrambling for cheaper money: pushing to get more loans backed by chips and large customer contracts rated investment grade, which would draw in conservative insurance capital, while also trying to build its own data centers to bring costs down.

The trouble is that the deep freeze across the computing power industry may arrive faster than CoreWeave can rescue itself.

Research firm Gartner has a sobering forecast: if AI service providers keep buying chips at the current pace, more than $3.5 trillion of global AI infrastructure investment will be at risk of depreciating into nothing by the end of 2030. More than 80% of the new breed of compute cloud providers like CoreWeave will lose their status as independent operators.

For the past few years, talk about the AI industry has fixated on how smart the models are, how many tens of thousands of chips were bought, how many billions a contract was worth. CoreWeave's simultaneous selloff in stocks and bonds has finally slammed the harshest financial exam paper onto everyone's desk: the demand for AI is real, but the actual pace of making money cannot possibly sustain the enormous computing capacity that everyone has rushed to build.

In this AI gold rush, the giants have pushed heavy assets and enormous debt off their own statements, and the founders have cashed out at the top. So who, in the end, pays this multitrillion-dollar computing power bill?