Neocloud Shorts Book $6B Paper Gains; Nebius Leads at $2.94B

Investors betting against five US neocloud and data center companies have made $6 billion in paper profits so far in October, Reuters reported on 22 October 2026, citing data analytics firm ORTEX. Reuters said the gains came “after fears their debt-fueled AI buildout was becoming unsustainable sparked a selloff.”

Nebius was the biggest single source: short sellers made $2.94 billion on it in October, though ORTEX’s data still shows them with a paper loss of $3.33 billion for the year. CoreWeave shorts made close to $1.7 billion as its shares slumped almost 30%. About $17 billion of stock in the five companies is sold short, ORTEX said.

Business Pill · NEOCLOUDS

A short Business Engineer explainer on neoclouds: companies that rent AI chips by the hour. It teaches the general idea only and says nothing about any company or trade in this piece.

What Was Reported

Short interest in CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific ranged from about 20% to 26% of their free float, according to ORTEX, Reuters reported. The report gives these figures:

• CoreWeave. Short interest stands at 23.7% of its free float, up from 19.6% at the start of the month and slightly above the 22.7% seen at the beginning of 2026. Short sellers have made close to $1.7 billion in paper profits this month.
• Nebius. Short interest has climbed to 20% of free float, from 15.4% at the start of 2026. Short sellers have made $2.94 billion in paper profits in October, “though they have recorded a paper loss of $3.33 billion year-to-date.”
• IREN and Applied Digital. Short sellers of the two data center operators have recorded combined paper profits of more than $1.2 billion this month.
• Core Scientific. Short interest is 23.1% of its free float, with short sellers clocking $115 million in paper profits in October.
• The total. “Together, about $17 billion of stock across the five companies is currently sold short and borrowing remains cheap for all of them, ORTEX said.”

What Was Posted on X

The Information posted this at 13:30 UTC on 22 October, linking to its own article. The post says executives expect only seven to 10 of the hundreds of AI cloud providers building data centers to survive, and that Nvidia is helping keep the market afloat through investments, credit support and customer referrals. We have read the post, not the article behind it. It matters here because the five companies in ORTEX’s data are among those AI cloud and data center providers.

CNBC posted this at 14:11 UTC on 22 October, linking to its article on Blackstone president and COO Jon Gray’s interview with “Squawk Box.” The post says Gray thinks CoreWeave can “find a way through” its financing pressure. It matters here as a counterpoint to the short sellers’ bet: Gray told CNBC the underlying business is “actually quite strong,” which is his view, not a finding.

The Table: Five Companies, $6 Billion

The table puts ORTEX’s figures side by side. It shows which companies the $6 billion came from, and how crowded each short is.

All figures are ORTEX data reported by Reuters on 22 October 2026; October figures are for the month so far. By our arithmetic, the four company figures add up to about $5.96 billion, in line with the $6 billion total.

The Nebius Split

Nebius is the one company where Reuters gives both an October and a year-to-date paper profit-or-loss figure. The two point in different directions. October’s $2.94 billion is the largest monthly gain in the report, but ORTEX still has Nebius short sellers $3.33 billion behind for 2026.

Read together, the two figures mean October has not yet made Nebius short sellers whole for the year. Short interest in the stock has also risen through the year, from 15.4% of free float to 20%, according to ORTEX.

The Debt Backdrop in Our Coverage

• Our piece on Nebius’s Citi facility covers the $3.5 billion senior secured facility it announced on 22 October 2026, with a 364-day maturity and interest starting at Term SOFR plus 2.75%.
• Our piece on CoreWeave’s debt yield covers CNBC’s 21 October report that CoreWeave’s unsecured debt was “sporting a yield of about 15%.”
• Our piece on Merlin Properties covers a European landlord’s exposure: CoreWeave accounted for roughly 80% of Merlin’s data centre business but 8.6% of its total rents in the first half of 2026, according to a Jefferies note.
• Our AI-doubts follow-up covers the wider premarket moves on the same morning, including Nasdaq 100 futures down 1.72%.

The Information made a related point in an X post on 22 October 2026: “Hundreds of AI cloud providers are racing to build data centers, but executives expect only seven to 10 to survive.” It added that “Nvidia is helping keep the market afloat through investments, credit support and customer referrals.” We have read the post, not the article behind it.

The Structural Read

As we read it, the short interest figures show how crowded these trades are: Reuters puts all five companies between about 20% and 26% of free float, with CoreWeave at 23.7%.

As we read it, the report ties the selloff to financing rather than demand: Reuters attributes it to “fears their debt-fueled AI buildout was becoming unsustainable.”

As we read it, the same day’s financing news sits on the other side of the trade: Nebius announced a $3.5 billion secured facility from Citi with a 364-day maturity, as our earlier piece reports.

Three Implications

FOR THE NEOCLOUDS Reuters reports short interest of about 20% to 26% of free float across CoreWeave, IREN, Nebius, Applied Digital and Core Scientific; as we read it, that is a large share of each company’s tradable stock borrowed and sold.

FOR THEIR LENDERS Our earlier pieces report CoreWeave’s unsecured debt yielding about 15%, according to CNBC, and Nebius borrowing from Citi at Term SOFR plus 2.75%, rising to a maximum of 3.50%, according to Nebius.

FOR NVIDIA The Information wrote in an X post that Nvidia is helping keep the market afloat through investments, credit support and customer referrals.

The Business Engineer Lens

This story maps onto the Business Engineer framework The AI Capex Map.

The framework’s thesis: “the capex race is no longer a corporate spending cycle. It is a sovereign-scale financing problem dressed in tech-company clothing”.

As we read it, short sellers’ $6 billion in paper profits is the equity market’s price on that financing question for the neoclouds, one of the groups the framework counts in its 2026 compute capex total. The framework was published in May 2026 and does not discuss these figures.

What Is Not Established

These are paper profits: ORTEX’s estimates of what short positions have gained on current prices, not realised gains. Reuters attributes the selloff to fears about debt-fueled buildouts; that is the outlet’s explanation, not a measured cause. Reuters gives no separate figures for IREN and Applied Digital, and no year-to-date figure for any company but Nebius. We have not seen ORTEX’s own data release. Short interest changes daily, and the figures are for October so far.

The Bottom Line

Short sellers betting against five US neocloud and data center companies have made $6 billion in paper profits so far in October, according to ORTEX data reported by Reuters. Nebius accounted for $2.94 billion and CoreWeave for close to $1.7 billion, and about $17 billion of the five companies’ stock is sold short. Nebius short sellers are still down $3.33 billion for the year, ORTEX’s data shows.