CoreWeave 5-year CDS spikes to ~1,100bps as market fears AI bubble starts as credit event
kimmonismus · x · 2026-10-26
Bloomberg reports mounting market fear that the AI bubble could burst, likely starting as a credit event — Sevens Report founder Tom Essaye warns that neocloud and risky AI debt defaults could cascade into devaluations and spending contraction.
CoreWeave's five-year CDS spread has spiked to roughly 1,100bps, more than double its yearly lows, a clear credit-stress signal. Musk has also predicted many neoclouds will run out of money.
Poster kimmonismus disagrees with the bubble thesis: neoclouds may suffer, but the compute won't disappear — it will be absorbed by companies with strong revenue, and the technology itself is too revenue-generative to be a bubble.
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