Michael Novogratz, the billionaire founder and CEO of the crypto financial services conglomerate and artificial intelligence data-center provider Galaxy Digital Inc., said the anxiety in global credit markets over AI spending is on the verge of easing.
“We have indigestion in the credit market,” Novogratz said on a conference call Tuesday following the release of Galaxy’s third-quarter results. “It is probably close to peak nervousness. There’s not an easy path out, but I think time is going to heal this thing.”
Yields on CoreWeave Inc.’s junk bonds recently surged to levels usually signaling distress after the company’s co-founder said the AI cloud computing provider was exploring ways to borrow in investment-grade debt markets. That raised broader concerns about how AI companies will continue to fund themselves. CoreWeave is a major tenant of Galaxy’s Helios facility in Texas.
Novogratz cited the raising of equity by Meta Platforms Inc. and the planned initial public offering by Anthropic PBC as signs of relief. Meta is seeking to raise $98 billion for its AI spending. Anthropic is poised to be the first major US firm focused solely on building AI software to make its market debut.
“More equity, less credit is one way to think about it,” Novogratz said. “This last week to some degree was good for the credit markets because we saw this massive amount of equity.”