Short sellers rack up $6 billion as AI debt fears deepen

Short sellers betting against US neocloud and data centre companies have earned about $6 billion in paper profits this month, as fears over debt linked to artificial intelligence triggered a sharp selloff in the sector.

CoreWeave, Nebius, IREN, Applied Digital and Core Scientific are among the companies facing heavy short interest. Short interest refers to shares that investors have borrowed and sold, betting their price will fall.

The bearish positions highlight growing concern over debt-fuelled spending on AI infrastructure, as firms borrow heavily to build out data centres and computing capacity.

The development reflects a broader unease among investors about whether the massive investments in AI can generate returns sufficient to service the debt taken on to finance them.