Decline in Shares of Cloud-Adjacent Companies Continues
Investors fear that a slowdown in the AI boom will complicate debt servicing for cloud-adjacent companies
Over the past month, shares of CoreWeave and Nebius have fallen by more than 30% amid concerns over debts raised for building data centers.
Musk believes that debt markets have almost completely cut off access to funding for companies without significant revenue unrelated to AI data processing centers. In his estimation, over 200 cloud-adjacent companies face mass exits and consolidation, though some may manage to sustain their business.
SpaceX secured $40 billion in debt financing for purchasing graphics processors but generates revenue from Starlink and rocket launches. Nvidia CEO Jensen Huang, in contrast, remains optimistic about the sector. Bernstein Research estimated that approximately 35% of the announced capacity for U.S. data centers will be built.
