CoreWeave, Nebius and Iren each fell more than 4% in premarket trading on Oct. 26, CNBC reported. The declines followed a warning from Elon Musk on Sunday, but CNBC also described investor concerns about the sector that predated his remarks.
Musk, the CEO of SpaceX and Tesla, posted on X that debt markets had “almost entirely shut off access to money” for companies without substantial revenue outside AI data centers, according to CNBC. He predicted “guppy-level death and consolidation” for what he called “200+ neoclouds,” adding that some would make it through, “but not many.” Those are Musk’s assessment and forecast, not a reported tally of failures.
The financing concern was already in view. CNBC described neocloud companies borrowing to buy Nvidia chips, build data centers and rent computing power. Investors were questioning whether the debt-fueled expansion and broader AI infrastructure buildout would generate returns.
Musk was replying to Social Capital founder Chamath Palihapitiya, who predicted that some computing capacity would be stranded or idle in 2027 and that the year would expose bad bets and bring consolidation. Barron’s offered a different outlook: Adam Clark argued that CoreWeave and Nebius shareholders should not panic, while a Barron’s post said the companies could pull through. A caption in Clark’s article said Nebius had secured a $3.5 billion credit line with Citi the previous week.
