Goldman Says 90% Of AI Spending Is Cash-Funded, Not Risky Debt: Don't Confuse CoreWeave 'Tail' Risks With Broader Market - CoreWeave (NASDAQ:CRWV)

Core Viewpoint - Goldman Sachs Asset Management maintains that the broader artificial intelligence (AI) trade remains structurally sound despite recent market volatility caused by significant stock drops in companies like CoreWeave Inc. [1] Funding Landscape - Sung Cho, co-head of public tech investing, argues that concerns about a debt-fueled bubble are unfounded, as 90% of the sector's infrastructure buildout is funded by robust corporate cash flows rather than risky borrowing [2][3] - The industry requires between $700 billion and $1 trillion for AI infrastructure over the next few years, with only 10% of this funding coming from debt [3] Risk Assessment - The recent decline in shares of CoreWeave and concerns surrounding Oracle Corp. are considered outliers and not indicative of systemic issues, representing only 2-3% of the overall debt funding picture [4] - Specific companies like CoreWeave are facing supply chain issues rather than a lack of demand [5] Shifts in AI Leadership - Investor sentiment has shifted, with Alphabet Inc.'s Gemini now viewed as the leading AI model, contributing to a $1 trillion market cap increase for Google in the last three months [6] Market Performance - CoreWeave's shares have dropped 23.34% over the last five sessions, although they are up 78.21% since their listing earlier this year [7]