The cost of insuring CoreWeave's debt against default has climbed to levels that signal distress, as investors grow wary of companies borrowing heavily to build artificial intelligence data centers, CNBC and Reuters reported Thursday.

The spread on CoreWeave's five-year credit default swaps, which act as insurance against a default, topped 1,140 basis points at one point and last stood near 1,038, a 16% jump from a week earlier and 164% higher than a year ago, CNBC reported. A level of 1,000 or more is generally a sign of credit distress, Gavan Nolan of S&P Global Market Intelligence told CNBC. Reuters said the cost implies a nearly 63% chance of default within five years, up from about 30% a year ago.

CoreWeave has taken on more than $51 billion of debt and obligations, CNBC reported. Reuters put its debt at about $50 billion. Yields on its April-issued bonds traded around 15%, Reuters said.

The stock fell 15.5% on Wednesday. On Thursday it slid as much as 8.3% to its lowest level since May 2025, Reuters reported, before closing 5.94% higher, according to CNBC.

Chief Executive Mike Intrator pushed back in an internal memo seen by both outlets. "We are confident in our backlog which more than supports all of our debt obligations," he wrote, according to CNBC.

Nvidia CEO Jensen Huang, whose company owns about 10% of CoreWeave, told reporters in Stockholm that "CoreWeave's financial strength is improving every day," Reuters reported. Nvidia has a deal to buy any unsold CoreWeave computing capacity through April 2032, Reuters said.

What we know: Default-insurance costs on CoreWeave debt are at distress levels even as its stock bounced back on Thursday.
What we don't: Whether the debt worries will spread to other heavily borrowed AI companies.