Neocloud firms extend declines as rate-hike fears hit debt-heavy AI firms

By Reuters News

** Shares of neocloud firms CoreWeave CRWV.O and Nebius Group NBIS.O drop 6.1% and 4.9% premarket, extending last session's selloff

** AI infrastructure-related firms slid on Wednesday after a hot consumer prices reading fanned concerns about risks posed by rising borrowing costs in the capital-intensive sector

** CRWV's 2031-maturity bond drops more than 1.4 cents on the dollar, and its yield surges to an all-time high of more than 15% - Tradeweb data

** Cost of insuring against CRWV's debt surges past 1,000 bps to record highs - S&P Global Market Intelligence data

** IT research firm Gartner predicts over 80% of neocloud providers will cease independent operations by 2030, due to cost pressures and a lack of differentiating business model from hyperscalers

** As of last close, CRWV shares were set to wipe out a quarter of its value this month, NBIS on pace to erase a fifth of its value

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