For years now, big tech and its financial backers have been blowing past the warning signs that human-level AI — the theoretical technology with hundreds of billions of dollars riding on it — could turn out to be a pipe-dream, at best.

Now, however, Wall Street appears to be yanking its money out of one of the largest datacenter providers in the game, possibly an early indicator that reality could be finally catching up to the massively hype-dependent AI industry.

On Tuesday, datacenter and tech infrastructure startup CoreWeave posted its second-quarter earnings results, as well as its forecast for the future. To say investors weren’t happy with the results might be an understatement. The tech company’s stock plunged over 20 percent on Wednesday, wiping out nearly two weeks of gains in a single day.

The stock shock comes from a reported loss of $131 million over the last three months, despite the fact that the company’s revenue has nearly tripled from his time last year — to a whopping $1.2 billion.

Put simply, its gargantuan spending is still eclipsing any money that it’s making.

“It’s an expensive business trying to stay ahead of the game and ensure enough capacity to underpin the demand for artificial intelligence services,” Hargreaves Lansdown head of money and markets Susannah Streeter told Reuters.

“CoreWeave does not currently generate enough profit to pay all its debt holders, certainly not equity holders,” D.A. Davidson analysts added.

The company also released its projections for the next three months, estimating its operating income will be somewhere between $160-190 million — evidently below investor expectations.

The CoreWeave shares are having a run-off effect for CoreWeave customers like Nvidia, the chip-giant supplying the parts that make CoreWeave’s datacenters run, along with Microsoft which is also facing some legal pressure related to Windows 10.

On paper, it’s a strange development.

As noted by Bloomberg, CoreWeave’s share price has quadrupled since the company went public in March. By all metrics, the firm is growing rapidly: its revenue beat out analyst expectations, it completed an acquisition of AI developer platform Weights and Biases, and snagged a five-year contract with OpenAI worth nearly $12 billion.

The problem, however, is that it’s growing a little too fast for its shell. Thanks to the US approach to AI development — which prioritizes spending cash over taking the time to engineer software that actually works — actual returns-on-investment are a ways off, and investors are growing increasingly skeptical of AI’s ability to deliver, at least at the industry’s current trajectory.

There’s also the tricky timing of CoreWeave’s lock-up period, the window of time when investors are prevented from selling their shares, which is set to expire tomorrow.

What happens when the lock comes off is anyone’s guess, but if today was any indication, it may not be pretty.

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The post The AI Industry Just Got Some Horrible News appeared first on Futurism.

Origianl Creator:Joe Wilkins
Original Link: https://futurism.com/ai-industry-hype-coreweave
Originally Posted: Thu, 14 Aug 2025 13:48:50 +0000