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Spent most of today driving myself insane learning about CoreWeave. This company is a fucking time bomb. They are burdened by $11 billion in debt on $2 billion of revenue - and they lost $800m. This company is a sickly dog with super-Ebola, and it may be the narrative twist that begins the collapse.

When I eventually write this newsletter I will explain why CoreWeave - the single-largest holder of GPUs outside of the hyperscalers and Elon Musk (250k+, first in line for Blackwell) - is on the path to oblivion. Microsoft is 60% of their revenue and just canceled some contracts. It’s bad.

“Why should I care about CoreWeave? They’re just a company that sells AI compute!” Well, right now the stock market is already a little sensitive. The AI narrative is losing its shine. NVIDIA is spiralling a touch. CoreWeave is the first real AI IPO - and it’s a dog. Can the narrative survive?

When all of this crap eventually collapses, I want everybody - not just people who read business or finance stuff - to understand who was responsible, what caused it to happen, and what the warning signs were. Greedy people become very rich by hiding behind dense financials. They won’t anymore.

Trump will be so dumb to bail them out.

Sam Altman will remind him of his $500 billion AI pledge and that letting the industry implode will make him look like an idiot, so he will.

Just waiting for the investors to get a clue

The funny thing is that what will start the collapse will not be an event, but a shift in investor sentiment that has been taking root for months. They never got a compelling answer for DeepSeek. They never got a meaningful growth story. There’s no revenue. CoreWeave is a dog. No story.

All of this shit is happening as multiple supposed experts go on specious rants about the idea that AGI is just around the corner as the fundamentals of the businesses are so obviously blinking red that the ethical thing would be to ask how ChatGPT exists past the year 2025. It’s a disgrace.

I’ve thought for a while now that this feels like the dot com bubble. All this money being dumped into AI - where’s the ROI going to come from? What’s the “killer app” that people will pay for? It’s not gonna be pretty when the AI bubble pops.

mate I’m using AI to pick lottery numbers and I won £5 last month. now that’s nowhere near what I spent on lottery tickets but we’ll get there - we’ll make some money.

Ed I have to assume you feel like Mark Baum in this scene in the Big Short at all times youtu.be/A25EUhZGBws?...

There hasn’t been anything as egregious as the CDOs and I doubt that it’ll reach that. But CoreWeave, out in the open, the company that SHOULD be doing very well, is an absolute dog, a complete monstrosity, and will be a public black eye for AI writ large.

CoreWeave feels like the only company, other than Nvidia, that should be making bank on this nonsense.

I remember reading about subprime mortgages in the months before the collapse of 07/08 and this feels weirdly familiar

It is different, and I believe the bubble popping would be something different. A lot of the market is propped up by the Mag7 and the Mag7 is like 19% NVIDIA, and NVIDIA has been having it rough. CoreWeave is not a small customer, they have priority on GPUs in fact.

When this bubble pops, will it be less or more devastating to the overall economy than 2008?