CoreWeave Founders Cash Out $3.3 Billion: The First Crack in the AI Computing Power Bubble

According to Bloomberg's report, since CoreWeave's IPO in March 2025, its three co-founders Michael Intrator, Brian Venturo and Brannin McBee have cumulatively sold $3.3 billion worth of the company's stocks. In 2026 alone, they cashed out $2.4 billion.

The release of this news came in the exact same week when CoreWeave's credit risk indicators soared to a record high.

On October 14, McBee said in an interview with the Financial Times that the company is seeking "unlimited" capital from insurance companies to support the expansion of AI computing power. He described this type of capital as "unlimited, that's all the money in the world". The next day, the spread of CoreWeave's 5-year credit default swap once rose to 1194.5 basis points, hitting the intraday highest level on record. According to the pricing of the credit default swap market, the implied probability of CoreWeave defaulting on its debt in the next five years exceeds 60%.

The stock price plummeted 15.46% on Wednesday and continued to fall on Thursday. This NVIDIA-backed AI cloud service provider is becoming a key sample for the market to examine the financing model of AI infrastructure.

Founders are selling, the bond market is pricing in risks

The speed at which the three founders reduced their holdings is worth a closer look.

Intrator has sold off more than $907 million worth of the company's stocks since January 1, 2026, making him one of the top five insider sellers of U.S. companies in the past two quarters. As of the IPO date, he has sold shares equivalent to 16.5% of his undiluted equity. McBee has sold off a larger share — he has sold $1.06 billion worth of stocks since the IPO, including $577 million this year alone, equivalent to 40.4% of his undiluted shareholding since the company went public. Venturo sold $734 million worth of stocks in the second quarter, making him the second largest insider seller of U.S. companies in the same period.

The company spokesperson responded with standard wording: the founders are still the top six shareholders, holding a total of about 20% of the shares, all sales are pre-arranged and fully disclosed, in line with the 10b5-1 trading plan, and "are personal financial planning decisions that any responsible founder with concentrated shareholding will make".

Meanwhile, CoreWeave's debt size is expanding rapidly. As of the end of June, its total consolidated debt and lease obligations have reached as high as about $52 billion. In August 2026, the company raised its annual capital expenditure forecast by $4 billion to a maximum of $39 billion, mainly for purchasing GPUs and expanding AI computing infrastructure. Visible Alpha's market consensus forecast shows that between 2026 and 2028, CoreWeave's cumulative negative free cash flow will reach $71 billion.

What the founders sold is equity. What the company issues is bonds. When the stock price fell by more than 60% from its high point, the founders' total paper wealth evaporated by $15 billion, but they locked in $3.3 billion in cash by reducing their holdings. Bondholders do not have this option — if the company defaults, their repayment priority comes before shareholders, but only on the premise that the company still has assets to distribute.

The vision and reality of "unlimited capital" The core of the financing plan McBee described to the Financial Times is to introduce the trillion-dollar capital pool of the insurance industry into the AI computing power financing system. The company plans to continue to promote the "delayed draw term loan" mortgaged by chip assets, and push the scale of power consumption in use to expand from the current 1.5 GW to more than 8 GW by the end of 2030.

This plan is not unprecedented. A $8.5 billion loan settled in March 2026, mortgaged by chip assets and Meta's long-term computing power procurement contract, obtained full investment-grade ratings from Moody's A3, DBRS A(low) and Fitch A-sf, anchored by Blackstone Credit & Insurance, with a number of global financial institutions and insurance investors participating, and the subscription saw "meaningful" oversubscription.

But there is a key structural distinction here. This investment-grade rating is for that specific transaction, not for CoreWeave as a company. The borrower is a bankruptcy-remote special purpose entity, the loan is mortgaged by all its assets and has no recourse to the parent company. Rating agencies look at the cash flow generated by Meta's contract plus the residual value of NVIDIA chips, not CoreWeave's balance sheet. All three ratings of CoreWeave's corporate entity itself are in the speculative grade: Moody's Ba3, S&P B+, Fitch BB-.

McBee himself also admitted that loans guaranteed by offtake contracts from non-investment-grade customers (such as AI laboratories) "have not yet reached the access threshold for insurance capital". The "unlimited capital" he envisions is currently only open to specific transactions with investment-grade customer contracts, not to CoreWeave as a whole.

An arithmetic problem of value destruction

DA Davidson analyst Gil Luria previously called CoreWeave a "subprime-like" target in the AI field. He gave a specific calculation in a podcast program: CoreWeave's borrowing cost is as high as about 9%, but the return on investment is only a mere 1%. Even if it reaches the company's target return rate of 4% to 5%, it still cannot cover the financing cost.

Luria's metaphor is: take out a loan at an interest rate of 9% to buy U.S. Treasury bonds with a yield of 5%. Every step of this strategy is destroying value.

Jordan Chalfin, an analyst at the research institution CreditSights, pointed out another structural problem: there is a maturity mismatch between CoreWeave's long-term data center leases and customers' short-term contracts. "Once there is over-construction of computing power, what reason do customers have to renew their contracts with CoreWeave?"

These problems can be temporarily put aside under the assumption that AI computing power demand continues to grow. But a report released by Gartner in October gave a more macro warning: by 2030, more than $3.5 trillion of AI infrastructure investment may face the risk of asset impairment, because the investment boom in this industry may exceed the revenue growth that can support these inputs.

Jensen Huang's endorsement and the market's skepticism

While the bond market priced CoreWeave's debt default probability at more than 60%, NVIDIA CEO Jensen Huang gave a completely different judgment in an interview in Stockholm, Sweden. "CoreWeave is getting stronger every day," he said. "I am very optimistic. In fact, their cost of capital is falling." When asked if NVIDIA needs to provide financial support to CoreWeave, Jensen Huang said there is no such need.

NVIDIA holds about 10% of CoreWeave's shares, it is not only its GPU supplier, but also its second largest shareholder, and has also promised to purchase $6.3 billion worth of cloud services from CoreWeave. This relationship has raised market concerns about "circular financing" — chip suppliers invest in downstream customers, and customers use these funds to purchase suppliers' products, which may magnify the apparent scale of AI infrastructure demand.

Jensen Huang's optimistic remarks are in sharp contrast to the risk signals released by the credit market. But he did not provide specific financial data to support the judgment that "the cost of capital is falling".

The founders' choices speak for themselves

Back to the question at the beginning of the article: what does the $3.3 billion cash out mean.

The company spokesperson said this is "personal financial planning". This statement itself is not problematic. The 10b5-1 plan is a legal tool for listed company executives to manage personal assets, and it is not uncommon in Silicon Valley for founders to sell part of their shareholding for diversification.

But the core of the problem is not whether the sales are compliant, but the scale and timing of the sales. In the same week when the credit default swap market priced the company's five-year default probability at more than 60%, and in the same week when the founders publicly talked about "unlimited capital", the three co-founders sold $2.4 billion worth of stocks within 12 months. They know better than anyone else the company's debt structure, the maturity arrangement of customer contracts, and the depreciation rate of GPU assets.

Nearly 40% of McBee's wealth is currently held in the form of cash and equivalents. This number itself is a signal.

The core assumption of the financing model for AI computing power infrastructure is that demand growth can cover the cost of capital. When this assumption holds, debt is leverage; when it does not hold, debt is a burden. The founders chose to turn part of their equity into cash, and the bond market chose to price in default risk. These two actions point to the same direction.

As for where this direction leads — whether it is industry integration after over-construction of computing power, or the inflection point of the AI infrastructure investment cycle — CoreWeave will not give the answer. It is just placing a huge bet. The money Mark Zuckerberg used to place bets is not entirely his own, and the founders of CoreWeave have already converted part of their bets into cash.

This article is from the WeChat Official Account "Tech Business", written by Tech Business, published with authorization from 36Kr.