Deirdre Bosa summarizes what's been going on in tech this week: CoreWeave's (CRWV) third quarter earnings and the associated concerns with circular AI financing, Nvidia's (NVDA) Jensen Huang controversy and upcoming earnings results, Anthropic's (ANTH.PVT) IPO buzz, and more.
The AI trade got some relief today thanks to Coreweave and NVIDIA. Some context here. Last week, Coreweave's bonds, they were yielding more than 16%. Lenders, they were getting nervous. So last night on the earnings call, they addressed this head-on. Coreweave said that it wouldn't issue that kind of debt at these rates through 2027.
Instead, its customers are paying upfront, about $9 billion over the next three months. So that did help calm some nerves. But
here's the thing. More and more of the money that is keeping the AI build out going, it continues to come from inside the AI industry itself. Now, of course, this isn't new.
We've been talking about circular financing for years now, but it is all the more important to flag here amid recent volatility because even though we saw today's big move up, it has still been incredibly volatile. and it's also important because the kingmaker of a lot of these deals, Jensen Wong,
of course, he is coming under some extreme scrutiny. So, you can also see some of that circular trade in Anthropic's IPO as well. Bloomberg reports that the deal is already several times oversubscribed. Alongside it, though, you've got seven tech companies buying $26 billion of stock. NVIDIA and Google, they're each in for about 10 billion.
All seven of those companies, they sell anthropic chips and the computing power that run that it runs on. Now, on top of that, anthropic
has signed up for about $90 billion in computing and infrastructure. Those are its costs. And about half of it comes due before the end of 2030. So the suppliers that are helping fund a customer that's promised to buy from them. Now, the growth is real. Anthropic brought in $17 billion last quarter, more than 12 times a year earlier.
There's a chart floating around on X and from the Investor Day actually that just shows how incredible this is. Also, don't forget Coreweve.
That revenue grew 168%. But again, we are seeing the risk concentrate. When the same companies are on every side of the deal, a stumble anywhere hits all of them. So next week we'll test that. NVIDIA reports Tuesday. Anthropic likely goes public. A strong debut debut of course would show outside investors are still willing to join in. A week one though means that the industry keeps carrying more of the bill itself.
