--- title: "Not Just Coreweave: Data Center Bonds Face 'Bond Sell-Off'" type: "News" locale: "en" url: "https://longbridge.com/en/news/302035444.md" description: "Data center bonds are experiencing a comprehensive sell-off: Coreweave bonds have fallen below 80 cents, with yields approaching 15%, while projects backed by Microsoft and Nvidia under Blackstone and Blue Owl are also under severe pressure. Gartner warns of a gap exceeding $5 trillion between AI revenue and capital expenditure, suggesting that 80% of emerging cloud computing companies may cease to exist by 2030, with $4 trillion in assets at risk of impairment. The moment of 'natural selection' has arrived" datetime: "2026-10-16T00:18:18.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/302035444.md) - [en](https://longbridge.com/en/news/302035444.md) - [zh-HK](https://longbridge.com/zh-HK/news/302035444.md) generator: "portal-rs" --- # Not Just Coreweave: Data Center Bonds Face 'Bond Sell-Off' The data center bond market is undergoing a comprehensive sell-off. Gartner predicts that 80% of new cloud computing companies will cease independent operations by 2030, while the Chief Investment Officer of Allianz warns that data center bonds are facing a moment of 'natural selection'. According to a Thursday report by the Financial Times, **prices for everything from specialized financing bonds for large data centers leased to Meta, Microsoft, and Nvidia, to debt issued by emerging cloud computing companies like Coreweave, have all fallen into stressed territory,** reflecting deep investor doubts about the sustainability of returns on AI infrastructure investments. Direct triggers for this round of selling include OpenAI postponing its IPO until next year, Anthropic's slowing quarterly revenue growth, and OpenAI's disclosure last week that its actual annualized revenue was far below previous expectations. These signals have intensified market skepticism about AI monetization capabilities, triggering linked declines in both stocks and bonds. Nvidia's market capitalization evaporated by approximately $270 billion over the past week, Coreweave's stock price fell cumulatively by about 17% during the week, and competitor Nebius dropped by 18%. Concerns among asset management firms are spreading. Ludovic Subran, Chief Investment Officer of Germany's Allianz Group, stated: "Data center bonds are entering a 'natural selection' moment, where the weakest credit entities will struggle to survive. The surge in credit spreads caused by power and construction delays indicates that data center debt was previously priced too loosely for execution risk." ## Bond Prices Fall Across the Board, Some Touching Distressed Levels **The scope of this sell-off is broader than previously expected, no longer limited to emerging cloud computing companies but spreading to multiple data center financing projects endorsed by major tech giants as tenants.** Bonds issued by Beignet Investor, a special purpose vehicle jointly funded by Blue Owl and Meta for the Hyperion project, fell from above par value in early July to around 92 cents; bonds for two projects developed by Hut 8 in Louisiana and Texas (the latter leased by Nvidia) dropped to approximately 94 cents and 92 cents, respectively; bonds for Blackstone's QTS Data Center's "Project Excalibur" in Georgia (with Microsoft as the lessee) have fallen below 88 cents. Emerging cloud computing companies are facing even more severe impacts. Coreweave's issued bonds have dropped below 80 cents—a level typically regarded by the market as the hallmark threshold for distressed debt, with yields briefly approaching 15% on Thursday. As previously reported by the Financial Times, loans totaling approximately $18 billion related to Oracle's "Project Jupiter" data center in New Mexico have also slipped into stressed territory due to delays in obtaining power supply permits amidst local opposition; construction bonds for Oracle's AI campus in Michigan have also fallen from par value to 87 cents. ## Trillion-Dollar Gap: AI Revenue Far Insufficient to Cover Capital Expenditure The underlying logic behind the shift in market sentiment lies in the huge chasm between AI infrastructure investment and expected returns. Tech consulting firm Gartner released a report this week predicting that 80% of emerging cloud computing companies will "cease independent operations" by 2030 due to a multi-trillion-dollar gap between the pace of capital expenditure and AI return expectations. Gartner estimates that AI data center operators need to generate cumulative revenue of $8.5 trillion by the end of 2030 to cover capital and financing costs and achieve reasonable returns; however, it predicts that consumer and enterprise AI service spending flowing to data center providers "will not exceed $3.6 trillion." **Gartner warns: "If AI infrastructure investment maintains its current trajectory, more than $4 trillion in assets could face impairment risk by 2032."** In an interview with Bloomberg on Thursday, Nvidia CEO Jensen Huang stated that he believes Coreweave does not need financial support from Nvidia, saying, "I am optimistic; their cost of capital is actually decreasing," and adding that Coreweave's strength is "improving every day." ## Regulatory Headwinds and Circular Financing: Compounding Risks Cannot Be Ignored In addition to fundamental pressures, two types of structural risks are receiving increasing attention from investors. **The first is political resistance from local communities.** Backlash against data centers has spread across many parts of the United States, triggered by external concerns over water consumption, noise, and air pollution, which has led to the stagnation of some projects. New York and Texas have imposed strict restrictions on new projects, and other states are considering similar measures. Tom Murphy, Head of US Investment Grade Credit at Columbia Threadneedle, stated that the backlash in the data center sector is "an issue we are closely monitoring. I wouldn't say it has changed our investment decisions, but it does make those data centers that are already built and operational more valuable." **The second is circular financing risk.** A recent report by the Bank for International Settlements pointed out that "a significant proportion of financing and business relationships in the AI sector are self-referential"—meaning customers and suppliers finance each other. This structural characteristic means that if problems arise in any link, it could trigger a chain reaction, making risk transmission harder to predict. ## Market Divergence: Operational Assets Relatively Resilient Despite overall pressure, signs of divergence are emerging within the market. **Tom Murphy's comments suggest that data center assets already built and operational may gain a relative premium due to supply contraction in the current headwind environment.** This aligns with the logic of Gartner's report—new projects face the triple pressure of permit delays, rising financing costs, and revenue uncertainty, while the scarcity of existing high-quality assets will become even more pronounced. For bond investors, the core question now is: As bond yields for companies like Coreweave approach 15%, has the pricing of distressed assets fully reflected execution risk and industry cycle risk? The answer to this question may gradually emerge in the coming months through revenue data from AI demand-side players such as OpenAI and Anthropic. ### Related Stocks - [CRWV.US](https://longbridge.com/en/quote/CRWV.US.md) - [CORD.US](https://longbridge.com/en/quote/CORD.US.md) - [CRWG.US](https://longbridge.com/en/quote/CRWG.US.md) - [CRWU.US](https://longbridge.com/en/quote/CRWU.US.md) - [CRWX.US](https://longbridge.com/en/quote/CRWX.US.md) - [CWVX.US](https://longbridge.com/en/quote/CWVX.US.md) - [CWY.US](https://longbridge.com/en/quote/CWY.US.md) - [ALV.DE](https://longbridge.com/en/quote/ALV.DE.md) - [HUT.US](https://longbridge.com/en/quote/HUT.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [ORCL.US](https://longbridge.com/en/quote/ORCL.US.md) ## Related News & Research - [CoreWeave AI Growth Comes With More Than $35 Billion in Debt](https://longbridge.com/en/news/303108283.md) - [CoreWeave Adds Global AI Capacity as Cramer Questions Whether Rally Can Hold](https://longbridge.com/en/news/303237275.md) - [CoreWeave Inc. $CRWV Shares Bought by VIRGINIA RETIREMENT SYSTEMS ET Al](https://longbridge.com/en/news/303855073.md) - [CoreWeave Inc. $CRWV Shares Acquired by CUSHING ASSET MANAGEMENT LP dba NXG INVESTMENT MANAGEMENT](https://longbridge.com/en/news/303191803.md) - [‘Watch Out for the Trap,’ Says Top Investor About CoreWeave Stock](https://longbridge.com/en/news/301992810.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**