Big tech credit risks hit record high with surging AI costs
Complete. Here is the key summaryCredit default swap prices for major AI companies, including Alphabet, Amazon, Meta, Nvidia, and Oracle, have hit record highs due to surging AI infrastructure costs. Investors are increasingly cautious about the debt incurred by hyperscalers for data centers and models. Oracle's CDS spread recently reached a cycle high, while Alphabet's CDS also surged after its free cash flow turned negative, highlighting growing credit risks in the sector.
The prices of a key indicator of credit risk in AI companies have hit record highs with surging AI spending, according to data from LSEG. Credit default swaps that bet against debt tied to Alphabet (GOOG) (GOOGL), Amazon (AMZN), Meta (META), Nvidia (NVDA), Oracle (ORCL), SpaceX (SPCX), and Broadcom (AVGO) have risen to record highs. The increase co...