CoreWeave taps $9 billion in prepayments to fund AI buildout

CoreWeave's third-quarter earnings show a company trying to square rapid growth with the cost of building AI infrastructure. Revenue rose 168% to $3.66 billion, but the net loss of $709 million and $846 million in quarterly interest expense highlight how much debt has funded that expansion. CEO Michael Intrator drew a line on Tuesday: CoreWeave will not use the unsecured debt market at current yields. Instead, it is leaning on customer prepayments and loans tied to specific contracts, drawing funds as needed to build against a $132.5 billion backlog.

That shift carries trade-offs. Upfront payments ease near-term borrowing needs but lock in service prices that could look low if compute demand keeps climbing. Shorter-term contracts command much higher prices — more than $40 million per megawatt annually, against $20 million to $25 million for four- and five-year deals — yet lenders favor the predictability of longer contracts. Bond investors have already signaled concern: last month, yields on some CoreWeave bonds topped 15%, reflecting unease about debt taken on before data center investments pay off. How smoothly CoreWeave manages contract renewals and pricing will show whether this financing model can sustain the AI buildout.