NCCapital

Executives at AI infrastructure firm CoreWeave, including CEO Michael Intrator, have sold off more than $1 billion in stock since the start of the year, Business Insider reports, raising questions about their long-term commitment despite impressive revenue growth and major contracts. Governance experts view such actions as potential warning signs for investors, since a host of AI-related firms haven't turned a profit. The CoreWeave executives remain "deeply committed to CoreWeave's long-term growth and execution," per a spokesperson, who said the selloffs were done "to manage personal liquidity and diversification." Banks offloading data centre loans: limits of financing the AI boom Global banks, like JPMorganChase, Morgan Stanley and SMBC Group, are actively trying to distribute and de-risk exposure to massive data centre debt tied to AI infrastructure, using private credit, structured risk transfers, and secondary sales The "so what": • AI infrastructure is hitting balance sheet limits: The scale of borrowing from players like Oracle and CoreWeave is unprecedented. Single projects are large enough to strain even the biggest banks’ risk appetite • Financing innovation is catching up to compute demand: Banks have in recent weeks sounded out investors about structures including a variant of a significant risk transfer, or SRT • Risk is being pushed deeper into the banking system: Banks are slicing and selling exposure to private credit funds, insurers, and alternative investors. This mirrors past cycles, where risk transfers happened to reduce exposure to big borrowers and free up capacity for more lending (i.e., risk migrates to less regulated pools of capital) • Pricing of risk is still being discovered: Some loans are already being sold at discounts. Investors are demanding higher returns for taking on complex, illiquid, and concentrated exposure