AI Debt Is a ‘Brewing Crisis,’ Ed Zitron Warns as Amazon, CoreWeave Turn to Complex Financing
AI skeptic Ed Zitron says private credit funding the AI data-center boom is already a "brewing crisis," as developers face higher borrowing costs and delays getting new facilities online. The warning comes as Amazon (NASDAQ: AMZN ) considers moving $8 billion of Nvidia (NASDAQ: NVDA ) chips, already in use, into a vehicle funded by outside investors. Amazon would then lease the chips back, freeing up capital now while taking on future lease payments. Goldman Sachs counts $88 billion of lower-rated AI-related borrowing this year. Neuberger Berman counted about $20 billion in junk bonds and leveraged loans over the first 11 months of 2025, The Bond Market Is Getting Nervous "If the stock market is measuring how excited we should be, the bond market is measuring how worried we should be," Zitron said in an interview with Monetary Matters. He pointed to CoreWeave Inc. (NASDAQ: CRWV ), which reported $35.6 billion of debt as of June 30. Its expansion has leaned on private credit, including an $8.5 billion facility anchored by Blackstone Credit & Insurance, alongside bonds and convertible debt. Zitron estimated that issuing conventional CoreWeave debt at recent market s
AI skeptic Ed Zitron says private credit funding the AI data-center boom is already a "brewing crisis," as developers face higher borrowing costs and delays getting new facilities online. The warning comes as Amazon (NASDAQ: AMZN ) considers moving $8 billion of Nvidia (NASDAQ: NVDA ) chips, already in use, into a vehicle funded by outside investors. Amazon would then lease the chips back, freeing up capital now while taking on future lease payments. Goldman Sachs counts $88 billion of lower-rated AI-related borrowing this year.
Neuberger Berman counted about $20 billion in junk bonds and leveraged loans over the first 11 months of 2025, The Bond Market Is Getting Nervous "If the stock market is measuring how excited we should be, the bond market is measuring how worried we should be," Zitron said in an interview with Monetary Matters. He pointed to CoreWeave Inc. 6 billion of debt as of June 30. 5 billion facility anchored by Blackstone Credit & Insurance, alongside bonds and convertible debt.
Zitron estimated that issuing conventional CoreWeave debt at recent market spreads could cost roughly 13%, though that is his calculation rather than the yield on a new offering. "It isn’t just their customers paying them, it’s their ability to get the data centers online fast enough to get paid," Zitron said. " "This private credit is already a brewing crisis," he added. Anthropic Growth Has Already Challenged Zitron’s Call In June, Zitron said Anthropic would not sustain the growth needed to support its then-reported $47 billion annualized revenue run rate.
5 billion and its run rate passed $65 billion by the end of July, But a draft IPO prospectus Zitron argues stronger demand may not solve the financing problem because more usage requires more compute and more capital. "It’s a cash flow issue," Zitron said. " Amazon can afford to seek unusual ways to finance its AI buildout. Zitron’s warning is that stress may emerge further down the chain if data-center delays collide with increasingly expensive debt.
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