Investors betting against five U.S. neocloud and data centre companies had about $6 billion in estimated paper profits so far in October, according to ORTEX data cited by Reuters.
The gains followed a selloff driven by concerns over the cost of building AI infrastructure and the debt used to fund it.
The companies are CoreWeave, Nebius Group, IREN, Applied Digital and Core Scientific.
Short interest ranged from about 20% to 26% of each company’s free float, or the shares generally available for public trading.
Together, investors had sold short about $17 billion worth of their stock, ORTEX said. These figures reflect conditions through October 22. Because they track share prices, the estimated profits can change quickly as stocks move.
How short selling works
A short seller borrows shares and sells them, expecting the price to fall. Later, the investor buys shares to return to the lender.
If the price has dropped, the difference can produce a profit before borrowing fees and other costs. If the price rises, the short seller may lose money instead.
That is why the reported $6 billion represents paper gains, not necessarily cash already secured.
Short sellers may keep their positions open, and a rebound could reduce or erase those gains. In addition, high short interest can amplify a rally if investors rush to buy shares to close their bets.
The share of free float sold short helps show how crowded a bearish trade may be. For example, CoreWeave’s short interest reached 23.7% of its free float, up from 19.6% at the start of October.
Nebius reached 20%, compared with 15.4% at the start of 2026.
Why debt is weighing on neoclouds
Neocloud companies rent computing power, often using advanced chips, to businesses that train or run AI systems. This model can serve customers who need computing capacity without building their own data centres.
However, providers must spend heavily on chips, buildings, electricity and cooling before they can deliver that capacity.
As a result, investors are asking whether future customer revenue will justify the buildout and its financing costs. CoreWeave short sellers had nearly $1.7 billion in estimated paper profits for October as its shares fell almost 30%.
The company reported a $104 billion revenue backlog at the end of June, plus more than $25 billion in new customer commitments early in the third quarter.
Still, those commitments represent expected future revenue, not cash already received.
Nebius shorts had about $2.94 billion in estimated October gains. Yet they remained down about $3.33 billion for the year, showing how quickly the trade can reverse.
Meanwhile, short sellers betting against IREN and Applied Digital had more than $1.2 billion in combined paper gains. Core Scientific shorts recorded about $115 million.
The latest figures show a sharp shift in sentiment toward companies central to the AI data-centre expansion.
However, they do not prove that demand for AI computing has disappeared. Instead, they highlight investors’ questions about funding, construction costs and the time needed to turn capacity into revenue.
