CoreWeave default insurance tops 1,082 basis points

The stress in AI infrastructure credit is showing up in the price of protection against default. Five-year insurance on CoreWeave's debt now trades above the 1,000-basis-point threshold that typically signals distress, and shares of CoreWeave, Nebius and IREN are each down at least 30% this month. Nvidia's exposure — $7 billion invested directly plus $164.5 billion in guarantees and commitments — underscores how interconnected the chipmaker is with the cloud providers renting out its hardware.

This week's earnings from Microsoft, Alphabet and Amazon will show strong AI revenue, but those numbers reflect the sellers of chips, cloud and models, not whether their customers are seeing returns. Apollo's chief economist Torsten Slok has noted that profit margins at the seven biggest tech companies rose from about 15% to about 25% between early 2023 and early 2026, while margins at the other 493 S&P 500 companies stayed around 10%. If hyperscalers raise spending again, the risk sits with companies that borrow to rent out chips and with customers who must make the spending pay.