Neocloud provider CoreWeave, Inc. (CRWV.US), whose second-largest shareholder is NVIDIA (NVDA.US), is preparing a multi-billion USD loan backed by chips to test market appetite for AI financing, Financial Times reported. CoreWeave is relying on asset-backed debt and customer prepayments to fund its continued expansion.
The upcoming loan will finance the purchase of NVIDIA chips and other computing equipment to fulfill a contract with an unnamed investment-grade customer. The company said the loan is expected to carry an interest cost of about 7-7.5%, less than half the yield on CoreWeave's unsecured debt. A company executive said the financing would raise several billion USD.
CoreWeave CEO Michael Intrator told analysts on Tuesday that chip-backed loans can cover 70-100% of the cost of financed equipment, contingent on the customer. Looking ahead, the company will not use the unsecured debt market for business financing at current yields, nor does it need to do so.
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AASTOCKS Financial News
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