An ominous move has occurred in the AI industry as the shares of US data centre operator CoreWeave plunged overnight over worries over its huge debt pile in a period of rising interest rates.
The world’s richest man Elon Musk appeared concerned over the development, writing a single word response to the sell-off which sparked a chain reaction as other debt-reliant AI firms like Nebius, Applied Digital, TeraWulf, and Cipher Mining also saw their share prices plunge.
“Yikes,” wrote Mr Musk in response to a graph posted on X showing how the slump rippled through the market, causing a 12 per cent fall across all ‘neocloud’ companies listed on Wall St.
A neocloud is a specialised cloud provider built from the ground up to deliver high-performance graphics processing units (GPUs) and artificial intelligence infrastructure.
Sounds a little harsh. Tech stocks had a bad day on Wall Street however people are not going to change their habits.