AI debt fears shake the stock market

What happened

Worries about the debt used to fund the artificial intelligence boom spread across markets this week. "Stock market today" searches rose in Singapore and other financial hubs as tech shares fell in Asia, Europe and the US. At the centre was CoreWeave, a cloud provider that rents out AI computing power, whose shares dropped about 15% on 14 October and whose bonds slid, according to Reuters and other reports. In Hong Kong and Japan, "debt" became a trending search as the sell-off in its bonds weighed on the Nasdaq.

The details

One of CoreWeave's bonds was yielding around 15%, a level usually linked to financial stress, and the cost of insuring its debt against default rose to about 1,000 basis points, Reuters reported. The company carries roughly $50 billion of debt, is loss-making and raised its 2026 capital spending forecast to as much as $39 billion. Its quarterly interest expense more than doubled from a year earlier to $640 million. Management told staff its contract backlog more than covers its debt obligations. On 15 October the shares steadied after touching their lowest level since May 2025.

A wider test for AI spending

The sell-off was not limited to one company. The Philadelphia Semiconductor Index lost more than $1.6 trillion in value over six sessions, and the Nasdaq fell over 3% in the same period. US tech giants are expected to spend more than $700 billion on AI infrastructure this year, much of it funded by bonds. Investors are now watching the planned stock market listing of AI company Anthropic, where reports say valuation expectations have been tempered, as a test of whether fast revenue growth can ease doubts about the spending.

Background: the crypto mining link

CoreWeave started life as an Ethereum mining operation before turning its graphics processors to AI workloads. Several bitcoin miners have since followed a similar path, leasing data-centre space and power to AI customers, often with borrowed money. That makes AI credit conditions a crypto news story as well. During the turbulence the bitcoin price also slipped, as crypto traded alongside other risk assets.

Why it matters for payments

When investors pull back from risk, money tends to move towards safer assets and the US dollar, and exchange rates can swing. That matters to anyone sending a money transfer abroad or holding dollar-linked balances, including stablecoin payments users. Tighter credit for tech firms can also slow investment in new payment infrastructure, from data centres to fraud-detection systems that rely on AI.

What to watch next

Key dates include CoreWeave's results in November, the timing and pricing of the Anthropic listing, and whether bond investors keep demanding higher returns from AI-related borrowers. Watch also for knock-on effects on bitcoin miners that have moved into AI hosting, and for central bank comments on interest rates, which shape both stock and crypto markets.

What it means for ODIX Pay users

Market swings can change exchange rates quickly. With ODIX Pay you can send an international money transfer to bank accounts abroad and see the fee and exchange rate before you confirm, or top up your account by open banking. Availability depends on your country, and fees are shown in the app. This article is for information only and is not investment advice.