CoreWeave raises interest and adds safeguards to secure $2.6bn loan

In short: CoreWeave had to offer lenders a higher interest rate and stricter repayment rules to complete a $2.6bn loan backed by customer contracts, including Anthropic.

What happened

CoreWeave, a cloud computing company that rents out powerful chips for AI work, is raising $2.6bn through a loan. The loan is supported by money CoreWeave expects to receive from customer contracts, including a multi-year deal with AI company Anthropic.

Investors were cautious at first, and demand for the loan was weak. To win them over, CoreWeave increased the expected return to lenders to about 9.1% and added tighter protections. One new feature is a “lockbox,” which works like a dedicated mailbox for contract cash, so incoming payments go to repaying the loan before CoreWeave can spend the money elsewhere.

After the new terms were offered, orders for the deal rose to about $9bn, according to people familiar with the transaction. The updated pricing was also improved for lenders, including a higher amount above a key short-term interest rate called SOFR (a common benchmark rate in US lending).

The pushback comes as some investors have become more nervous about AI-related investments. They worry that some AI companies may spend too much on computers and data centers, and that revenues may not keep up. In CoreWeave’s case, lenders also focused on contract length, since many customer contracts last three to five years while some of CoreWeave’s data center leases can last up to 15 years.

Why it matters

This is a sign that borrowing money for AI infrastructure is getting harder and more expensive. When lenders ask for higher interest and more safeguards, it can slow down how quickly companies expand the computing capacity that many AI services rely on.

Source: Financial Times