SHARES of Nvidia-backed CoreWeave steadied on Thursday after a sharp slump, as investors worried about the debt financing behind the artificial intelligence build-out.
The loss-making cloud company has about $50 billion in debt and has become a focus of concerns that the data-center boom is being fueled by credit, straining newer players and pressuring cash flows even at giants such as Alphabet and Meta Platforms.
CoreWeave’s slump fueled a global rout in AI stocks, underscoring investor doubts about whether future revenue from the technology can keep pace with the spending.
Nvidia CEO Jensen Huang, whose company is CoreWeave’s second-largest investor with about a 10% stake, played down the fears. “CoreWeave’s financial strength is improving every day,” Mr. Huang told reporters at a Stockholm event, adding that he does not see a need for Nvidia to backstop the company. “I’m optimistic. Their cost of capital is actually decreasing.”
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