{"text":[[{"start":7.44,"text":"CoreWeave is preparing to test the appetite for AI financings with a chip-backed loan worth several billion dollars, as the cloud provider leans on asset-backed debt and customer pre-payments to fund its continued expansion."}],[{"start":20.58,"text":"The upstart AI cloud computing group is relying more heavily on these sources of funding as some of its unsecured debt trades in distressed territory, making it difficult to raise more debt at the corporate level."}],[{"start":32.24,"text":"“Looking ahead, we will not use the unsecured debt market to fund our business at current yields. Nor do we need to,” chief executive Michael Intrator told analysts on Tuesday. “We built CoreWeave to be an enduring business,” he added."}],[{"start":44.64,"text":"The change in tack from CoreWeave attests to the pressure on so-called neocloud AI infrastructure groups that have sought to capitalise on the boom around the technology but have seen their stock and debt sell off in recent weeks, as investors question whether they can finance and deliver on their ambitious plans."}],[{"start":61.92,"text":"The upcoming loan will fund the purchase of Nvidia chips and other computing equipment for a contract with an unnamed investment-grade customer. It was expected to carry an interest cost of about 7 to 7.5 per cent, less than half the yield on CoreWeave’s unsecured debt, the company said. An executive at the company said the loan would raise several billion dollars."}],[{"start":84.18,"text":"Chip-backed loans covered between 70 and 100 per cent of the cost of the equipment they finance, depending on the customer, Intrator said."}],[{"start":91.96,"text":"CoreWeave also said it expected about $9bn of customer pre-payments and deposits over the next three months, and that it would seek more of them. “In the current environment, pre-payments are more attractive,” Intrator said."}],[{"start":104.8,"text":"CoreWeave said it expected to raise less than $5bn of new capital at the parent company level through 2027. It has an at-the-market programme to sell up to 35mn shares, worth about $1.7bn at current prices, which it has not yet used."}],[{"start":118.56,"text":"At the end of the third quarter, CoreWeave had $4.1bn of cash on its balance sheet and a further $2.3bn of restricted cash. Its debt and lease liabilities rose to $66.2bn, from $51.6bn at the end of June."}],[{"start":135.76,"text":"CoreWeave’s revenue in the three-month period rose 168 per cent year on year to $3.7bn, ahead of the company’s guidance of $3.45bn to $3.6bn. CoreWeave raised its full-year revenue forecast to $13bn to $13.3bn, and its revenue backlog grew to $132.5bn from $104bn at the end of June."}],[{"start":162.12,"text":"But rising borrowing costs widened its net loss to $709mn, from $110mn a year earlier. Interest expense nearly tripled to $846mn, and CoreWeave expects it to rise to as much as $1.15bn in the fourth quarter."}],[{"start":179.4,"text":"CoreWeave’s shares were up about 5 per cent in after-hours trading."}],[{"start":182.92,"text":"With more than 1.7GW of active power at the end of September, CoreWeave is the largest of the neoclouds, matched in AI computing capacity only by SpaceX."}],[{"start":193.12,"text":"CoreWeave said its capital expenditure in the third quarter totalled $14.5bn, according to a company executive, against operating cash flow of $2bn. It expects to spend as much as $39bn on capex this year, but said it could slow the rise in its spending in 2027 depending on market conditions."}],[{"start":212.36,"text":"Chief financial officer Nitin Agrawal said that if CoreWeave built only the capacity customers have already committed to, its 2027 capital expenditure would stay in line with this year’s. “We have levers to control our capex,” he said. “This is a capital-intensive business, and we are stewards of that capital.”"}],[{"start":230.04,"text":"Additional reporting by Michelle Chan"}],[{"start":234.32,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794382035_2888.mp3"}