Several specialized cloud computing firms focusing on AI workloads can no longer secure new funding through corporate bond offerings as Wall Street grows wary of infrastructure debt. CoreWeave, Nebius, and Nscale have been effectively barred from the market in recent weeks, with lenders requiring significantly stricter terms. The liquidity squeeze is evident in CoreWeave’s unsecured notes, which now yield over 15%, and its credit default swap spread, which has climbed above 11%.
The credit tightenings extend to the broader data center sector, where at least 18 current deals require annual returns of more than 10%. While Treasury Secretary Scott Bessent described the situation as something the government monitors without needing to cause concern, market participants have ramped up protection; weekly hedge volume for AI assets grew from under $2B in July to over $9B in September. This volatility arrives as the industry manages a record $419B in AI-related bonds issued this year, with insurance costs against defaults for Nvidia and Meta hitting all-time highs.