Bonds of AI cloud provider CoreWeave fall as data center opponents win U.S. races
Democratic victories in several states deepened market concerns about the future of AI infrastructure projects
Last month, CoreWeave’s surging borrowing costs sent a shudder across markets, Bloomberg recalls / Photo: ChristianLphoto / Shutterstock.com
Prices of bonds issued by AI cloud computing provider CoreWeave fell on Wednesday, with several issues hitting new lows, Bloomberg reported. The declines followed victories in several governors’ races, including in Texas, by Democratic candidates who favor slowing data center construction.
CoreWeave’s unsecured bonds due in 2031 were among the biggest losers in the high-yield market on Wednesday, falling as low as 79.5 cents on the dollar, according to Trace data. Its bonds due in 2030 and 2032 also fell and are trading at levels the market considers distressed, with yields above 15%.
CoreWeave stock slid 9% to its lowest level since May 2025.
Context
One catalyst was Democrat Gina Hinojosa’s victory in the Texas governor’s race. Hinojosa has repeatedly called for an immediate moratorium on data center construction. Other Democratic governors-elect, including Amy Acton in Ohio and Keisha Lance Bottoms in Georgia, also called for slowing data center construction on the campaign trail in recent months.
A surge in CoreWeave’s borrowing costs rattled markets last month as traders tried to gauge whether speculative-grade companies tied to the AI infrastructure buildout could withstand higher interest rates.
