Key facts
- Seawolf Capital is shorting CoreWeave, a neacloud company leasing AI computing power.
- CoreWeave's business model is compared to Transocean and AerCap Holdings.
- Seawolf believes GPUs may have a shorter economic life than oil drills or airplanes.
- Seawolf cited projected 2027 free cash flow deficits and high leverage for CoreWeave.
- CoreWeave would require tens of billions of dollars in incremental capital, according to Seawolf.
Seawolf Capital, founded by traders made famous by 'The Big Short,' has taken a short position against CoreWeave, a neacloud company that leases AI computing power. Co-founder Vincent Daniel stated in a Substack article that CoreWeave's business model, which centers on leasing AI computing power enabled by high-end GPUs, reminded him of other asset-leasing companies like Transocean and AerCap Holdings. However, Seawolf believes GPUs may have a shorter economic life than assets like oil drills or airplanes. The firm also pointed to projected 2027 free cash flow deficits and current balance-sheet leverage as significant challenges for CoreWeave, suggesting that an investor would need to underwrite the company's ability to raise tens of billions of dollars in incremental capital on accretive terms. Daniel clarified that the firm's position is not a bet against the broader AI trade but rather a call on the availability and cost of capital in a tightening monetary cycle.