CoreWeave Raises Billions in Chip-Backed Loans at 7%-7.5% Interest

CoreWeave is preparing to test the market's interest in AI financing with billions of dollars in chip-backed loans. The loans will be used to purchase NVIDIA chips and other computing equipment to fulfill a contract with an unnamed investment-grade client. CoreWeave executives stated that the interest cost of these loans is expected to be between 7% and 7.5%, which is less than half of its unsecured debt yield. Recently, its unsecured "junk" debt yield exceeded 15%. CoreWeave CEO Michael Intrator mentioned that the chip-backed loans could cover 70% to 100% of the financing equipment costs. Additionally, CoreWeave expects to receive approximately $9 billion in customer prepayments and deposits over the next three months and will seek more such funding.

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