(Bloomberg) — Cloud-computing giants powering the artificial intelligence boom are tapping global debt markets to fund hundreds of billions of dollars needed for data centers, chips and other infrastructure. Junk-rated CoreWeave Inc. is now following their lead.
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The company is seeking to raise the equivalent of $3.55 billion in US and European debt markets, including what would be the first euro-denominated junk-bond offering by a US AI infrastructure company. A big portion of the offering will be in euros, €2 billion ($2.3 billion), while the dollar portion will be $1.25 billion, according to people with direct knowledge of the matter.
CoreWeave is pitching six-year notes at yields between 8.5% and 8.75% for the euro tranche and about 9.75% for the dollar tranche, according to the people. JPMorgan Chase & Co. is leading the offering, the person said, asking not to be identified because the discussions are private.
A representative for CoreWeave declined to comment.
The euro book has attracted significant demand, with more than €7 billion in orders already, one of the people said. It is attracting interest from most of the main high-yield buyers in Europe including real money accounts, hedge funds, credit funds and even some CLOs all looking to invest in what is expected to be one of the few deals in this space in Europe, they added.
“European investors have been looking for ways to gain exposure to the AI buildout, but opportunities of this scale and quality have been scarce,” said Hashem Shubber, JPMorgan’s managing director of leveraged finance capital markets.
The deal underscores how US companies building AI infrastructure are broadening their funding sources, accessing investor demand for exposure to the boom in markets from Canada to Japan.
Alphabet Inc. and Amazon.com Inc. have together raised the equivalent of $77 billion in non-dollar bond markets since the start of last year. Those issuers, however, all enjoy investment-grade ratings while CoreWeave is rated Ba3 by Moody’s Ratings, B+ by S&P Global Ratings and BB- by Fitch Ratings. CoreWeave’s offering will provide an early test of investor appetite for riskier AI-linked credits outside of the US.
CoreWeave, which rents out computing power and provides software to run AI applications, has quickly ramped up spending to add capacity. The company is expected to invest almost $35 billion and burn nearly $26 billion in cash this year, according to the average of analyst estimates compiled by Bloomberg.
