Fed Hike Bets Meet AI Debt Boom: Where Does the Squeeze Land?

The 10-year Treasury yield topped 5% on Tuesday as Fed officials floated faster hikes, the same day CoreWeave reported almost $47 billion in debt. The AI debt boom now hinges on borrowing costs the central bank is pushing higher. Demand is not the weak point, as CoreWeave, which rents artificial intelligence (AI) computing power to tech firms, beat revenue estimates and lifted guidance. However, funding is the strain, leaving leveraged AI firms and shareholders to absorb higher capital costs. Can a $132.5 Billion Backlog Outrun 16% Bond Yields? CoreWeave’s third-quarter results showed revenue up 168% to $3.66 billion and a contracted backlog of $132.5 billion. Yet some of its bonds have recently yielded more than 16%.

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