AI data center spending strains CoreWeave Meta and Oracle finances
CoreWeave, Meta, and Oracle are running into money problems after pouring huge amounts into AI.
The costs of building and running data centers are way higher than the money these companies expect to make from AI any time soon.
Investors are spooked: CoreWeave's bonds have dropped sharply, and NVIDIA lost $270 billion in value last week after OpenAI delayed its IPO and Anthropic's sales slowed down.
Gartner warns over $4 trillion shortfall
According to Gartner, data centers need $8.5 trillion in revenue by 2030 to cover capital and financing costs while delivering healthy returns, but they are only expected to pull in about $3.6 trillion, leaving a massive gap that puts over $4 trillion at risk.
Oracle's big Project Jupiter loans are under pressure due to delays with power permits, while bonds tied to Meta and NVIDIA projects have also lost value.
To top it off, the Bank for International Settlements is warning that all this borrowing could turn into a risky cycle where companies use debt to fund more debt, raising the chance of financial trouble for the whole AI industry.