What Lenders Recover When Compute Loans Default

We found no public record of a GPU-backed loan being foreclosed and its GPUs auctioned as of October 2026. The closest full test is the 2022 bitcoin-mining bust: equipment loans against serial-numbered, single-purpose computers, often in someone else's data center.

Mining lenders who took the machines back, or a quick cash payoff, recovered roughly 35 to 65 cents on the dollar. Lenders who stayed with a borrower that kept its power, site or contracts recovered 80 to 100 cents.

What lenders recovered

Lenders recovered the most when the collateral kept earning, and the least when they sold into a falling market. The table covers the 2022-2023 mining-equipment defaults whose outcome is in public filings.

Moody's found defaulted bank loans recovered 80.7% on average from 1987 to 2008. ^{[13]CFO.com, "Defaulted Bank Loans Face Lower Recovery Rate," on Moody's study of 1987-2008 defaults (September 23, 2008)https://www.cfo.com/news/defaulted-bank-loans-face-lower-recovery-rate/671465/} Telecom bonds traded at 16-16.5 cents just after default in 2001 and 2002, at the bottom of the fiber glut. ^{[14]Edward I. Altman and Gaurav Bana, "Defaults and Returns on High Yield Bonds: The Year 2002 in Review," NYU Stern working paper FIN-03-010 (February 2003)https://archive.nyu.edu/bitstream/2451/27147/2/wpa03010.pdf} Mining lenders who took the machines back landed between the two. Those whose borrower kept operating landed near bank loans.

The machines were the problem. The Hashrate Index ASIC Price Index for new-generation miners fell from $101.04 per terahash (TH, the unit of mining speed) at the start of 2022 to $14.88 at year end, down 85%. ^{[15]Hashrate Index (Luxor), "2022 Bitcoin Mining Year in Review": ASIC Price Index and hashprice (January 2023)https://hashrateindex.com/blog/hashrate-index-2022-bitcoin-mining-year-in-review/} A loan sized at 70% of early-2022 prices was under water by year end.

How the 2022 mining bust played out

Bitcoin miners raised as much as $4 billion in equipment financing during the boom, from lenders including NYDIG, Celsius, BlockFi and Galaxy. ^{[16]Bloomberg via Gulf News, "Crypto lenders' woes worsen as bitcoin miners struggle to repay debt" (November 30, 2022)https://gulfnews.com/your-money/cryptocurrency/crypto-lenders-woes-worsen-as-bitcoin-miners-struggle-to-repay-debt-1.1669836981837} The loans looked like many GPU loans in 2026: two- to three-year amortizing debt, secured by serial-numbered machines, often in a third-party hosting site.

Bitcoin fell, and hashprice (revenue per unit of mining speed) fell with it, from a 2021 high of about $0.41 per TH per day to $0.056 in November 2022. Miners' cash flow dropped below debt service just as machine prices fell 85%, so the collateral covered less than the loan. ^{[15]Hashrate Index (Luxor), "2022 Bitcoin Mining Year in Review": ASIC Price Index and hashprice (January 2023)https://hashrateindex.com/blog/hashrate-index-2022-bitcoin-mining-year-in-review/} Revenue and collateral fell together.

Core Scientific

Core Scientific told the SEC on October 26, 2022 that it would skip payments on several equipment financings. ^{[17]Core Scientific, Form 8-K: decision not to make payments due on equipment and other financings (October 26, 2022)https://www.sec.gov/Archives/edgar/data/1839341/000119312522270236/d395956d8k.htm} It filed for Chapter 11 on December 21, 2022 with about $836M of debt. ^{[5]Hashrate Index, "Under a mountain of debt: analyzing Core Scientific's current situation" (November 2022)https://hashrateindex.com/blog/under-a-mountain-of-debt-analyzing-core-scientifics-current-situation/}

NYDIG took 27,403 miners back to extinguish $38.6M. The filing said the loan exceeded the value of the machines. ^{[7]The Block, "Core Scientific cuts deal with lender NYDIG to extinguish $38.6 million in debt" (February 2, 2023)https://www.theblock.co/post/208323/core-scientific-cuts-deal-with-lender-nydig-to-extinguish-38-6-million-in-debt} The other equipment lenders chose between new stock and a new loan for 80% of their claim, maturing January 2029, at 13% for two years (mostly paid in kind) and 10% cash after. ^{[6]Core Scientific, Form S-1: plan of reorganization, miner equipment lender elections (April 2024)https://www.sec.gov/Archives/edgar/data/1839341/000162828024016122/core-20240413.htm}

Core emerged on January 23, 2024 and turned several sites into AI data centers leased to CoreWeave. ^{[18]Blockworks, "Core Scientific emerges from bankruptcy" (January 2024)https://www.blockworks.com/news/core-scientific-emerges-from-bankruptcy} CoreWeave offered about $9 billion in stock for the company in 2025, and shareholders voted it down as too low. ^{[19]SiliconANGLE, "Core Scientific shareholders dismiss $9B CoreWeave deal on valuation worries" (October 30, 2025)https://siliconangle.com/2025/10/30/core-scientific-shareholders-dismiss-9b-coreweave-deal-valuation-worries/} The lenders who took stock ended up owning a piece of an AI landlord.

IREN

IREN (then Iris Energy) financed miners through special purpose vehicles (SPVs) with limited-recourse loans from NYDIG. In November 2022, two SPVs earned about $2M a month of gross profit against about $7M of monthly debt service. ^{[20]The Block, "Iris Energy faces default by Nov. 8 on financed bitcoin miners" (November 7, 2022)https://www.theblock.co/post/182307/iris-energy-faces-default-by-nov-8-on-financed-bitcoin-miners}

NYDIG declared about $107.8M due, and 3.6 EH/s (exahash per second, one million TH) of miners stopped running. One facility was repaid in December 2022. A receiver took the other two SPVs in February 2023. ^{[12]IREN Limited, Form 10-K for fiscal 2025: NYDIG limited-recourse loans, receivership and settlementhttps://www.sec.gov/Archives/edgar/data/1878848/000187884825000063/iren-20250630.htm}

NYDIG then sued the parent. The British Columbia courts held that the parent had not guaranteed the loans, and in 2024 the appeal court refused to merge the SPVs into the parent. ^{[21]Bennett Jones, on the British Columbia Court of Appeal decision in the NYDIG v. Iris Energy SPV litigation, 2024 BCCA 244 (August 2024)https://www.bennettjones.com/insights/blogs/2024/08/in-dealing-with-fraudulent-conveyances-the-rebuttable-presumption-of-fraudulent-intent-ie-ca-3} IREN paid $20M in August 2025 to settle every claim. ^{[12]IREN Limited, Form 10-K for fiscal 2025: NYDIG limited-recourse loans, receivership and settlementhttps://www.sec.gov/Archives/edgar/data/1878848/000187884825000063/iren-20250630.htm}

The parent kept its sites, and in 2025 signed a $9.7 billion GPU contract with Microsoft. ^{[22]IREN Limited / Microsoft, Partner Statement of Work, Form 8-K (2025)https://www.sec.gov/Archives/edgar/data/1878848/000114036125040072/ef20058139_8k.htm}

Compute North

Compute North hosted miners for other companies and filed for Chapter 11 on September 22, 2022. Generate Capital, the lender on two sites, took them in the bankruptcy sale for $5M plus about $101M of its own loans. ^{[23]Hashrate Index, "Quantifying Compute North's 363 asset sale: who bought what and how much money was raised" (December 6, 2022)https://hashrateindex.com/blog/quantifying-compute-norths-363-asset-sale-who-bought-what-and-how-much-money-was-raised/}

Marathon had about $81M at Compute North in deposits, a note and preferred stock. It wrote off $55.7M and was left with a $40M unsecured claim. ^{[24]Marathon Digital Holdings, Form 10-K for fiscal 2022: Compute North exposure and impairmentshttps://www.sec.gov/Archives/edgar/data/1507605/000149315223007879/form10-k.htm} A customer's prepaid hosting deposits rank behind the host's secured lenders.

What the GPU era has shown so far

GPU credit has had stress without foreclosure. Each test since 2022 ended in a renegotiation, a forgiven bill, or credit support from a stronger party.

Rental rates fell faster than resale prices

H100 rentals rose above $8 an hour during the 2023 shortage. By August 2024, short-term auctions cleared at $1-2. ^{[25]Eugene Cheah, "$2 H100s: How the GPU Rental Bubble Burst," Latent Space (October 11, 2024)https://latent.space/p/gpu-bubble} H100 resale prices held up through 2025 while rental rates kept falling, because many data centers could not yet host Blackwell systems. ^{[26]American Compute, "GPU Residual Value: Underwriting a $3 Trillion Opportunity," Exhibit 15 (June 2026)https://www.amcompute.com/blog/gpu-depreciation-residual-value-report-2026}

The rental rate is the borrower's revenue and the resale price is the lender's recovery. They can move apart for a year.

Offtakers stopped paying and suppliers took the loss

Stability AI rented about $99M a year of compute from AWS, Google Cloud and CoreWeave. It short-paid its July 2023 AWS bill by $1M and did not plan to pay the $7M August bill. ^{[27]The Register, on Stability AI's unpaid cloud bills, citing Forbes (April 3, 2024)https://www.theregister.com/2024/04/03/stability_ai_bills/} In June 2024, new investors put in about $80M, and suppliers forgave about $100M owed plus $300M of future obligations. ^{[28]TechCrunch, "Stability AI lands a lifeline from Sean Parker, Greycroft," citing The Wall Street Journal (June 25, 2024)https://techcrunch.com/2024/06/25/stability-ai-lands-a-lifeline-from-sean-parker-greycroft} Nobody repossessed anything.

Strong offtakers renegotiate too. TD Cowen reported in February 2025 that Microsoft had walked away from leases totaling a couple hundred megawatts with at least two private operators. ^{[29]Bloomberg, "Microsoft Dropped Some AI Data Center Leases, TD Cowen Says" (February 24, 2025)https://www.bloomberg.com/news/articles/2025-02-24/microsoft-cancels-leases-for-ai-data-centers-analyst-says}

Delivery slipped at the largest neocloud

CoreWeave cut its 2025 revenue forecast to $5.05-5.15 billion on November 10, 2025 because one third-party data center developer fell behind. The customer accepted a new delivery schedule and kept the full contract value. ^{[30]Reuters via BusinessDay, "CoreWeave cuts revenue forecast on data centre delay" (November 11, 2025)https://www.businessday.co.za/world/international-companies/2025-11-11-coreweave-cuts-revenue-forecast-on-data-centre-delay/} A borrower with one site and one customer may not get the same patience.

Stronger parties added credit support

NVIDIA agreed in September 2025 to buy any CoreWeave capacity left unsold through April 2032, under a $6.3 billion order. ^{[31]CoreWeave, Form 8-K: NVIDIA order form with an initial value of $6.3 billion (September 9, 2025)https://www.sec.gov/Archives/edgar/data/1769628/000176962825000047/crwv-20250909.htm} Google backstopped up to $1.8 billion of Fluidstack's lease obligations to TeraWulf in August 2025, in exchange for warrants. ^{[32]The Block, "TeraWulf shares jump 50% after Google secures 8% stake as part of $3.7 billion 10-year AI compute deal" (August 2025)https://www.theblock.co/post/366959/bitcoin-miner-terawulf-shares-jump-50-after-google-secures-8-stake-as-part-of-3-7-billion-10-year-ai-compute-deal} Both protect the cash flow. The resale value of the GPUs stays with the lender.

What older asset classes add

Obsolescence did the most damage. In 1979 IBM launched its 4300 series and repriced every used mainframe. Itel, which had written $1.7 billion of leases on IBM-compatible computers, lost $443.3 million that year and owed $1.3 billion to more than 200 creditors. ^{[33]Christian Science Monitor, "Itel struggles to stay on its feet in technological storm" (December 30, 1980)https://www.csmonitor.com/1980/1230/123002.html}

Lloyd's underwriters had insured lessors against customers cancelling leases early, and lost about $400 million on that cover when one product launch triggered claims across the whole book. ^{[34]Lloyd's, "More interesting claims" (history of the market's catastrophes and claims)https://www.lloyds.com/about-lloyds/history/catastrophes-and-claims/more-interesting-claims}

Aircraft lenders can repossess 60 days after an airline files unless it cures, under Section 1110 of the Bankruptcy Code. ^{[35]11 U.S. Code Section 1110: Aircraft equipment and vesselshttps://www.law.cornell.edu/uscode/text/11/1110} GPU lenders have no equivalent, which is why Core Scientific's equipment lenders waited 13 months from filing to emergence.

Early warning signs in the cases

Each case above fails in one of four ways: the offtaker stops paying, the collateral falls below the loan, revenue starts late, or nobody can run the cluster. Most real defaults combine the first two.

The mining lenders that recovered best were paid from a site sale (Argo), kept the machines earning (Greenidge), or swapped the loan for a stake in a company that kept its power (Core Scientific). The ones that took machines back to sell took them near the bottom. For a GPU loan, the equivalent of keeping the site alive is a backup operator that can run the cluster within 30 days, with access rights written into the colocation contract.

In these cases the trouble showed before the missed payment:

• Days to pay. The offtaker pays later than terms two months running. Stability AI short-paid AWS a month before it planned to skip a bill.
• Offtaker runway. Under 12 months of cash against its commitments, a founder exit, a down round or an acqui-hire.
• Contract edits. Requests to defer delivery, cut reserved capacity or move to on-demand pricing.
• Coverage. Gross profit falling toward debt service, as at IREN's SPVs.
• Resale against the loan. A quarterly appraisal of the financed model crossing the LTV covenant, as ASIC prices did within months in 2022. Act then, not at maturity.
• The host's health. Unpaid power or colocation bills and the host's own debt, which Compute North's customers learned late.
• Serials and liens. GPU serial numbers that no longer match the UCC-1 schedule, or new UCC-1 filings by other creditors. First Brands, an auto parts maker that filed for Chapter 11 in September 2025, allegedly double- and triple-pledged its collateral. ^{[36]U.S. Attorney's Office, Southern District of New York, "First Brands executives charged in multibillion-dollar fraud" (January 2026)https://www.justice.gov/usao-sdny/pr/first-brands-executives-charged-multibillion-dollar-fraud}

References

1. Argo Blockchain, "Sale of Helios to Galaxy Digital and new asset-backed loan" (December 28, 2022)
2. Argo Blockchain, Form 6-K: interim results, Galaxy loan repaid (August 2024)
3. Greenidge Generation, Form 8-K Exhibit 99.1: debt restructuring with NYDIG (January 30, 2023)
4. Greenidge Generation, Form 8-K Exhibit 99.1: agreement to transfer the South Carolina facility to NYDIG (August 2023)
5. Hashrate Index, "Under a mountain of debt: analyzing Core Scientific's current situation" (November 2022)
6. Core Scientific, Form S-1: plan of reorganization, miner equipment lender elections (April 2024)
7. The Block, "Core Scientific cuts deal with lender NYDIG to extinguish $38.6 million in debt" (February 2, 2023)
8. CryptoSlate, "Core Scientific offloads 27,000 mining rigs to NYDIG to cover $38M loan," on the February 2, 2023 court filing (February 2023)
9. Stronghold Digital Mining, second-quarter 2022 results: agreement to return miners and eliminate $67.4 million of equipment financing (August 16, 2022)
10. Stronghold Digital Mining, investor presentation, Exhibit 99.3 (October 14, 2022)
11. Bitfarms, Exhibit 99.1: BlockFi loan repaid at a discount (February 9, 2023)
12. IREN Limited, Form 10-K for fiscal 2025: NYDIG limited-recourse loans, receivership and settlement
13. CFO.com, "Defaulted Bank Loans Face Lower Recovery Rate," on Moody's study of 1987-2008 defaults (September 23, 2008)
14. Edward I. Altman and Gaurav Bana, "Defaults and Returns on High Yield Bonds: The Year 2002 in Review," NYU Stern working paper FIN-03-010 (February 2003)
15. Hashrate Index (Luxor), "2022 Bitcoin Mining Year in Review": ASIC Price Index and hashprice (January 2023)
16. Bloomberg via Gulf News, "Crypto lenders' woes worsen as bitcoin miners struggle to repay debt" (November 30, 2022)
17. Core Scientific, Form 8-K: decision not to make payments due on equipment and other financings (October 26, 2022)
18. Blockworks, "Core Scientific emerges from bankruptcy" (January 2024)
19. SiliconANGLE, "Core Scientific shareholders dismiss $9B CoreWeave deal on valuation worries" (October 30, 2025)
20. The Block, "Iris Energy faces default by Nov. 8 on financed bitcoin miners" (November 7, 2022)
21. Bennett Jones, on the British Columbia Court of Appeal decision in the NYDIG v. Iris Energy SPV litigation, 2024 BCCA 244 (August 2024)
22. IREN Limited / Microsoft, Partner Statement of Work, Form 8-K (2025)
23. Hashrate Index, "Quantifying Compute North's 363 asset sale: who bought what and how much money was raised" (December 6, 2022)
24. Marathon Digital Holdings, Form 10-K for fiscal 2022: Compute North exposure and impairments
25. Eugene Cheah, "$2 H100s: How the GPU Rental Bubble Burst," Latent Space (October 11, 2024)
26. American Compute, "GPU Residual Value: Underwriting a $3 Trillion Opportunity," Exhibit 15 (June 2026)
27. The Register, on Stability AI's unpaid cloud bills, citing Forbes (April 3, 2024)
28. TechCrunch, "Stability AI lands a lifeline from Sean Parker, Greycroft," citing The Wall Street Journal (June 25, 2024)
29. Bloomberg, "Microsoft Dropped Some AI Data Center Leases, TD Cowen Says" (February 24, 2025)
30. Reuters via BusinessDay, "CoreWeave cuts revenue forecast on data centre delay" (November 11, 2025)
31. CoreWeave, Form 8-K: NVIDIA order form with an initial value of $6.3 billion (September 9, 2025)
32. The Block, "TeraWulf shares jump 50% after Google secures 8% stake as part of $3.7 billion 10-year AI compute deal" (August 2025)
33. Christian Science Monitor, "Itel struggles to stay on its feet in technological storm" (December 30, 1980)
34. Lloyd's, "More interesting claims" (history of the market's catastrophes and claims)
35. 11 U.S. Code Section 1110: Aircraft equipment and vessels
36. U.S. Attorney's Office, Southern District of New York, "First Brands executives charged in multibillion-dollar fraud" (January 2026)