CoreWeave default insurance spikes: AI debt fears grow

Signs of distress deepened for CoreWeave on Thursday. Credit default swaps (CDS) tied to the AI cloud company jumped to levels that signal serious investor worry. A CDS works like insurance: buyers pay a fee to protect against a borrower failing to pay its debts. When that fee rises sharply, it shows the market sees higher risk. For CoreWeave, those costs have now reached "distress" territory — a term for prices that typically mean lenders expect real trouble. The move points to growing doubts about the company's debt, and by extension, the wider pile of borrowing behind the AI boom. Investors have poured money into AI firms at a rapid pace. Now, some are asking whether that spending can be repaid. CoreWeave's CDS jump is the latest signal that confidence may be cooling.