Barclays Warns Wall Street in AI Financing 'Denial' as CoreWeave Bond Yield Nears 15%

Barclays strategist Alexander "Alty" Altmann said Wall Street remains in a "denial phase" over mounting AI financing problems, warning that risks may be underestimated even as stress signals emerge. He compared the pattern to the 2008 crisis, when subprime mortgage financing issues surfaced 12 to 24 months before major banks were hit. CoreWeave (CRWV) bond yields climbed to nearly 15% in mid-October, far above the 9.675% at issuance. Barclays also flagged widening spreads on data center debt, including bonds tied to Meta (META). Cipher Digital's $850 million convertible bond and concurrent debt-for-equity swap proposal on October 13 sent its shares down nearly 13% on dilution concerns. Altmann noted data center builders are borrowing billions without sufficient operating cash flow, while cash-rich customers like Alphabet (GOOGL) and Amazon (AMZN) keep spending. A Barclays survey found only about 60% of investors expect financing problems — a share he said should be 100%. He added that AI firms must compete for capital as corporate bond issuance is projected at $1.1 trillion this year.