A look inside the $52 billion hole that CoreWeave needs to climb out of

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CoreWeave investor explains how the loss-making AI ‘neocloud’ provider plans to claw its way out of a $52 billion hole

CoreWeave—and the vast amount of debt it has taken on to fund its business—dragged down the entire stock market this week. According to its Q2 earnings release, it had operating lease liabilities of $16.3 billion and total debt of $35.6 billion. The company only made $4.6 billion in revenue for the first six months, and its operating expenses exceeded its sales, leaving it with a net loss of $1.4 billion on the bottom line in the period.

To put it simply, how will a company that makes no money pay back $52 billion in combined debt and lease commitments?

The short answer is that the company has $103.7 billion of “remaining performance obligations” (RPOs), 41% of which is scheduled to be paid to CoreWeave through 2028, its Q2 disclosure states. Those RPOs are “take or pay” agreements that CoreWeave’s customers cannot weasel out of.

Not everyone is a believer. “If CoreWeave is counting on Microsoft to honor its contracts and bail them out of extreme debt and losses I have a bridge in Brooklyn I’d like to sell them,” Francine McKenna, the accountant and investigative journalist who has taught at The Wharton School, told Fortune.

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