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CoreWeave’s breakneck rise from a crypto-garage outfit to an AI hyperscaler reads like a Wall Street fever dream — built not on steady, boring profits but on mountains of borrowed money and a wager that the AI boom will never cool. The company quietly stitched together massive credit lines and private debt facilities to buy the expensive NVIDIA chips that fuel modern AI, then turned those leased clusters into revenue-generating contracts.
CEO Michael Intrator hasn’t been shy about the playbook: debt, he says, is the fuel that lets CoreWeave scale faster than competitors. That swagger paid off in a March IPO that raised about $1.5 billion but also exposed investor skepticism when the deal came in well below its hoped-for size and the stock opened under the offering price.
Investors and taxpayers should take notice: the company’s filings and reporting show material weaknesses in internal financial controls and at least one eyebrow-raising loan technical default tied to cross-border expansion. Those aren’t small accounting quibbles — they’re the kind of governance failures you expect to see in a business built on leverage, and they amplify the danger when a firm’s balance sheet is more like a house of cards than a fortress.
Make no mistake: CoreWeave’s customers are the marquee names everyone watches — deals with OpenAI and big tech partners fuel massive revenue backlogs and make the outfit indispensable to many AI projects. But strategic importance to the AI stack does not make over-leveraging wise; it just makes the potential fallout more consequential if the credit taps slow or chip prices and demand normalize.
Who supplied the oxygen for this growth? Big banks and private credit players that happily underwrote eye-watering debt facilities, including a headline $7.5 billion deal led by major private-equity and credit houses. That’s Wall Street writing a blank check on faith — faith that the next model won’t change the economics or that GPU values won’t tumble — and conservatives should be skeptical of any market that rewards leverage over durable business models.
There’s a broader lesson for the country: boom-era hype around the next great thing too often blinds investors and regulators to simple prudence. Let the market sort winners and losers, but demand honest books, real accountability from management, and a refusal from financial intermediaries to paper over structural risk with rollovers and restructurings when the math doesn’t add up.
Americans who work for a living don’t want their savings or the stability of our markets put at risk by Wall Street’s appetite for casino-sized leverage and Silicon Valley’s hunger for growth at any cost. Call it caution, not fear: we should cheer innovation that actually builds value for the long term, and we should loudly oppose the kind of debt-fueled empire-building that piles risk onto ordinary investors while a few founders and funds chase fortunes.
