CoreWeave, which rents GPU computing capacity to AI labs and hyperscalers, sits at the heart of a circular financing story that worries some investors. Further, interest expense hit $640 million last quarter, accounting for more than 25% of its revenue.
CoreWeave, which rents GPU computing capacity to AI labs and hyperscalers, sits at the heart of a circular financing story that worries some investors.
Bond interest is due now while backlog revenue only becomes cash when data center capacity comes online over several years.
Against that debt load sits a revenue backlog of approximately $100 billion, consisting mostly of take-or-pay contracts (buyer must pay whether they use the service) with Meta, OpenAI, Microsoft, and Anthropic.
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CoreWeave, which rents GPU computing capacity to AI labs and hyperscalers, sits at the heart of a circular financing story that worries some investors. Further, interest expense hit $640 million last quarter, accounting for more than 25% of its revenue. Against that debt load sits a revenue backlog of approximately $100 billion, consisting mostly of take-or-pay contracts (buyer must pay whether they use the service) with Meta, OpenAI, Microsoft, and Anthropic.
On paper, that is roughly threefold debt coverage.
Yet CoreWeave's 5-year bonds yield nearly 13%. Bond markets aren't doubting the authenticity of the backlog contracts. Three narrower concerns likely explain the high yield.
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