By Alexis Goldstein
This article was originally published by Truthout
As firms like CoreWeave and NVIDIA start to wobble, let’s demand that the public won’t be the one left holding the bag.
AI data centers are unpopular for good reason: they drive up utility costs for communities, crowd out everything from schools to family farms, and they’re bad for our health. But these data centers are also a financial crisis in slow motion.
The AI ecosystem is built on mountains of debt taken on not only by tech firms like Meta (which borrowed a record-breaking $25 billion in late 2025 to fund the building of data centers), but also by the companies that lease data center space to the Big Tech firms. Many of these firms have spent far more than they have come close to earning in profits: One estimate puts tech industry spending to build data centers at $1.9 trillion, but less than half of that money has been made in revenue.
The financial markets are taking notice.
There’s been significant turmoil in the tech sector over the past month — and at one critical company in particular: CoreWeave.
CoreWeave used to be a Bitcoin mining firm called Atlantic Crypto, but it started to pivot to AI in 2019. CoreWeave leases space to Big Tech firms at data centers they build and maintain. CoreWeave has paid for most of its data centers by borrowing: it currently owes more than $51 billion to investors, including two of the most infamous financial firms: Magnetar and Blackstone, as documented by journalist Elizabeth Lopatto at The Verge.
CoreWeave’s troubles have been piling up: its stock lost a quarter of its value — a 25 percent drop — last week, then dropped another 10 percent on October 22. Bond investors are demanding more money if they’re going to take on the risk of buying CoreWeave debt, a sign the markets are worried about CoreWeave going bust. Investors used to be content to be paid 9.75 percent a year to loan CoreWeave money until 2031; now bond market investors won’t take that risk without being paid almost 15 percent in annual interest.
But perhaps the worst bit of news for CoreWeave is in the market’s falling confidence in its ability to survive, as measured by the cost of an instrument known as the credit default swap, which is essentially a bet that a company is going to go bankrupt (it’s also described as insurance against that company’s bankruptcy). The cost of buying a five-year-long credit default swap for CoreWeave has increased over 164 percent in the past year.
It’s not just CoreWeave facing trouble. One of the most significant companies in the AI ecosystem is NVIDIA, the graphics card maker, which, on September 28, spent $150 billion to buy back shares of its own stock from the overall market.
It was a record-breaking stock buyback — no other company in history had ever purchased that much of its own stock. One reason companies buy back their own stock is to artificially boost the stock price. Often the CEO’s compensation is tied to the price of the stock, and so the company purchases its own stock back to drive up the price, thus guaranteeing the CEO higher compensation.
The market sometimes perceives a stock buyback as a sign of confidence, reinforcing the idea that the company itself is underpriced. But in the case of NVIDIA, it seemed to be an indication that there’s nowhere higher to go, and the only way to raise the price of NVIDIA stock, which has been on a record tear, is to artificially boost it. Financial journalists have questioned NVIDIA’s ability to keep rocketing upward since late 2025. NVIDIA stock is down around 5 percent since this latest buyback.
AI has been sold to the general public as everything from a panacea to a danger to humanity to a roaring bull market, but it’s starting to look more like financial mania.
In late 2025, OpenAI CFO Sarah Friar caused a stir when she suggested the government should backstop AI firms like hers. Astra Taylor and Naomi Klein warned about the potential for an AI bailout in their new book End Times Fascism: And the Fight for the Living World, and propose a new disarmament movement.
To disarm the big tech bomb, including AI, the public needs to be on high alert — as AI firms start to visibly wobble, we need clear demands and firm commitments from our leaders that if it all comes crashing down, the public won’t be the one left holding the bag.
This article was originally published by Truthout and is licensed under Creative Commons (CC BY-NC-ND 4.0). Please maintain all links and credits in accordance with our republishing guidelines.
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