AI cloud computing companies face ‘guppy-level death’, Elon Musk warns, as funding dries up – business live
Rolling coverage of the latest economic and financial news Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The flow of funding which has helped the AI industry to grow rapidly could be running dry, at least for some firms in the cloud computing world, Elon Musk has warned. As of the past few weeks, debt markets have almost entirely shut…
Elon Musk has warned that some AI cloud computing companies, known as "neoclouds," may face death or consolidation due to difficulty accessing funding, as debt markets have nearly stopped providing money to firms without significant revenue from AI data centers. Musk, who recently announced that SpaceX secured a $40bn debt deal for its artificial intelligence work, stated that many neoclouds could experience "guppy-level death" akin to the guppy fish dying when environmental changes occur.
Neoclouds, such as CoreWeave, have seen a decline in share prices and climbing costs for insuring their debt, which could further intensify investor concerns.
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