Nvidia CEO Jensen Huang recently said that artificial intelligence (AI) demand is booming. But Tesla CEO Elon Musk is warning of "death and consolidation" among the companies supplying it. These views might seem at odds, but both CEOs could be right. Earlier this month, CoreWeave (NASDAQ: CRWV) and other "neoclouds" -- companies that specialize in renting out computing power for AI -- saw their stock prices tumble as investors reacted to turbulence in debt markets. Yields on bonds from CoreWeave -- one of the most prominent neoclouds -- reached 15%. At the same time, the cost to insure its unsecured debt soared. Credit default swap (CDS) spreads, which measure that insurance cost, reached roughly 1,100 basis points. Translation: It takes about $110,000 annually to insure $1 million of CoreWeave debt against default. Huang stepped in to try to calm the market, telling investors that CoreWeave's "financial strength is improving every day." He said that the market's concerns were misplaced because demand for AI compute is "off the charts."
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