CoreWeave looks to tap ‘unlimited’ insurance capital to fund data centre expansion

CoreWeave, a cloud computing company that operates AI-focused data centres, hopes to get backing from the deep pockets of insurance companies, its co-founder told the Financial Times.

In an interview with the paper, Brannin McBee, CoreWeave’s co-founder and chief development officer, said that getting investment-grade ratings for its chip-backed debt and eventually the company itself, could allow it to borrow from insurers.

McBee described their capital as “unlimited”, adding: “That’s all the money in the world that sits in the insurance tranche.”

The Nvidia-backed cloud provider currently has multi-billion-dollar contracts to provide compute to major AI developers, including Meta and Anthropic. Earlier this year, the company was able to secure an $8.5 billion chip-backed loan built around one of its long-term contracts with Meta.

This was its first loan of this kind to be investment rated in full, the FT reported. Now, McBee told the paper, CoreWeave wants to encourage insurers to buy loans backed by lower-rated customers, such as AI labs.

“I don’t think that non-investment-grade offtakes from us are ready to go into the insurance tranche yet. I do think it’ll get there,” he said.

CoreWeave’s book is also loaded with debt, reaching around $52 billion by the end of June, up from $15 billion a year before. This is around 5.8 times its annualised second-quarter EBITDA.

Fears around the company’s expansion strategy have spooked investors in recent days. On Monday, the company’s 2032 bond spiked to 15 per cent, closing that day at 14.5 per cent. In the last five days of trading, the company’s share price has fallen over 24 per cent and has continued to drop in pre-market trading at the time of writing.