Shares of AI-focused cloud providers fell as doubts grew about funding their costly expansion, while SK hynix stopped plans to take its Solidigm storage unit public, citing market conditions and share-price trends.
CoreWeave, Nebius and IREN were among the hardest-hit companies, with each down more than 30% in October as investors reassessed the risks of expansion funded by debt. CoreWeave’s credit-default-swap spreads, which measure the cost of insurance against default, topped 11%. Yields on some of its bonds that are not backed by collateral rose above 15%, signs of growing concern in debt markets.
The selloff reflected investors’ questions about whether future returns from AI services would justify the heavy spending on data centers and computing capacity. Solidigm, SK hynix’s U.S.-based maker of flash memory and solid-state drives, had considered an IPO and raising money before an IPO to help pay for more U.S. production capacity as AI-related demand grew. On October 23, SK hynix said it had stopped reviewing both options.
It added that Solidigm still needed to expand. It said it would consider other ways to fund growth. South Korean financial authorities had also raised concerns about protecting shareholders and a possible listing in two markets.
Those concerns added pressure around the proposal. The withdrawal of the IPO highlighted the more difficult funding conditions. But it did not mean Solidigm had abandoned its expansion plans.