To Buy its Treasured GPUs, CoreWeave Taps Junk Bonds for AI Build-Out

CoreWeave sold more than $5 billion in convertible and junk bonds in late September to finance its continued spending on building AI infrastructure. Some of that money will go directly to its upcoming billion-dollar data center in Virginia.

The bond sales reflect CoreWeave’s aggressive strategy of tapping every available financing method to fund capital expenditures. The company in 2026 alone raised over $30 billion in debt and equity. In June, CoreWeave reported its current debt of $35.5 billion with a debt-to-equity ratio of 10.27. The company projects to spend between $35 billion and $39 billion total this year on infrastructure.

“We have not a lot of religion around this stuff,” said Michael Intrator, CoreWeave’s co-founder and CEO, at a tech conference in early September. “You look at the space and say, ‘what is the cheapest way to raise the best possible capital to be able to execute on our roadmap?’ And that has been the defining North Star around the capital market structures that we use.”

CoreWeave rents out its network of computer infrastructure to AI companies that require access to powerful GPUs. Global demand for computer chips has far outstripped supply. That has allowed CoreWeave to amass a $104 billion backlog of orders. The neocloud is racing to install vast amounts of computer hardware to deliver on these contracts.

Intrator stated the company aims to operate 8 GW in computer hardware by 2030. But installing that much computer power requires billions in upfront costs. UBS projections estimate the 8 GW goal will cost $260 billion in capital expenditure over the next three years.

At one point, established tech companies like Google, Amazon’s AWS, and Microsoft primarily self-funded AI data center construction thanks to strong cash flow from other parts of their business. Now, they have turned to credit financing as well. CoreWeave has sought to expand into software and developer services, but its income comes almost entirely from its infrastructure. Revenue growth thereby comes directly from purchasing and installing new GPUs, which requires billions in upfront costs.

CoreWeave is no stranger to thinking outside the box when it comes to borrowing money. In 2023, CoreWeave became the first company to secure financing by collateralizing the value of the physical GPUs and its backlog of contracts. GPU-collateralized debt, as it became known, has drawn controversy because computer chips depreciate so quickly. CoreWeave and other neoclouds have nevertheless continued to employ the method to borrow billions more.

Building that much debt has had its drawbacks. While CoreWeave reported $2.58 billion in revenue for its most recent quarter — more than double the same period last year — the company recorded a net loss of $626 million in Q3 while paying $640 million in interest expenses. More trouble could be on the horizon if interest rates continue to rise. For every percentage point increase in interest rates, CoreWeave reported its interest payments could rise by $30 million each quarter.

CoreWeave’s share price has plummeted 35% over the past year — closing most recently at $82 — due to concerns over the large increase in debt. The company is betting that its rental price increases and higher margins will outpace the debt.