If the small company borrowing billions makes you nervous, Blackstone has a sensible suggestion: look at its customers. They may be Microsoft or Meta. That is certainly more comforting than looking only at the small company borrowing billions.

TechCrunch reports that Blackstone’s Jas Khaira describes a financing model built around both pledged GPUs and contracts with major customers. In 2023, CoreWeave approached the firm for a $2.3 billion loan when it had about $30 million in revenue and minimal profitability, according to Khaira. Its hardware and blue-chip contracts helped make the loan possible. A business could be young and small, provided its customer list was old enough to borrow responsibly.

The model spread. CoreWeave’s debt is now about $50 billion, the report says. That is a current debt figure, not a debt-to-revenue comparison with the company’s 2023 sales. The reassuring part of Khaira’s explanation is that lenders price risk relative to an investment-grade customer such as Microsoft or Meta. We have followed the nervous thought up the chain and arrived at a very large balance sheet.

Unfortunately, the interest rate came with us.

Make powerful people uncomfortable.
Subscribe to Democrawonk.

Khaira also says the cost of debt for Microsoft and Meta has widened. Base rates have risen, lenders want larger premiums and AI infrastructure debt has been arriving in abundance. The names that help explain why a loan can be made do not freeze the price at which it can be made. Excellent credit still has to shop in the same market for money.

The pressure is already more than a mood among commentators. TechCrunch reports that CoreWeave shares dropped more than 20 percent in recent days. Firmus abandoned a planned Australian IPO at a target valuation of roughly $30 billion; Khaira said the market was not there at that price. Investors were offered a piece of the future and asked whether it came in a smaller valuation.

None of this establishes a coming crash. Khaira explicitly rejects the comparison with shaky banks in 2008 and points to the highly creditworthy companies behind most data-center demand. That is a real distinction. A customer’s ability to pay matters enormously.

I accept the reference. It has an impressive balance sheet, a famous name and a more expensive loan of its own.