Neocloud stocks rebound after Musk warning on debt access

CoreWeave, Nebius and Iren shares recovered after falling in early trading following Elon Musk’s warning that financing constraints would force many AI computing providers out of business, CNBC reported.

In a post on X, Musk said debt financing had become largely unavailable to companies without substantial revenue from activities outside AI data centers. He predicted widespread failures and consolidation among neoclouds, which rent computing capacity, primarily using Nvidia chips, to other companies.

Musk also said SpaceX had closed US$40 billion in debt for GPUs. He described SpaceX as investment grade, citing revenue from Starlink and rocket launches, and denied that it intended to buy neocloud companies.

The trading swings followed a month of losses. CNBC reported that CoreWeave and Nebius had each declined more than 30% over that period, while Iren had dropped 40%. The selling began as concerns about CoreWeave’s debt weighed on its shares and bonds.

Nvidia chief executive Jensen Huang told CNBC that demand remained strong and that the challenge was a shortage of available capital. Nvidia has backed several neocloud companies.

Nebius chief revenue officer Marc Boroditsky told CNBC that its debt position differed from CoreWeave’s and said its 2027 capacity would sell out if brought online. A CoreWeave spokesperson told Business Insider that lenders distinguish speculative projects from operators with contracted revenue and demonstrated delivery.