--- title: "The rise of the financial market's new strategy to hedge against the AI bubble: betting on Oracle's debt default due to heavy investments in AI" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/266783915.md" description: "Oracle Corporation has become a barometer for AI risk in the credit market due to its large-scale AI investments. Because of its weak credit rating, traders have flocked to Oracle's credit default swap (CDS) contracts to hedge against AI bubble risks. In recent months, the cost of protecting against Oracle's debt default has surged, with CDS trading volume skyrocketing to about $5 billion. Despite a significant shrinkage in Oracle's market value, its default risk is considered low, and a shake in investor confidence in AI could lead to further increases in CDS prices" datetime: "2025-11-20T16:40:53.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/266783915.md) - [en](https://longbridge.com/en/news/266783915.md) - [zh-HK](https://longbridge.com/zh-HK/news/266783915.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/266783915.md) | [English](https://longbridge.com/en/news/266783915.md) # The rise of the financial market's new strategy to hedge against the AI bubble: betting on Oracle's debt default due to heavy investments in AI Once considered a dull database giant, Oracle Corporation is increasingly becoming a barometer for measuring artificial intelligence (AI) risk in the credit market; the company has borrowed tens of billions of dollars, firmly tying its fate to the prosperity of AI. Due to Oracle's substantial spending related to AI and its core role in the intertwined trading networks, along with a weaker credit rating compared to companies like Microsoft or Alphabet Inc., traders have recently flocked to Oracle's credit default swap (CDS) contracts, making it the preferred way to hedge—and short—the AI boom. According to statistics from Intercontinental Exchange (ICE) data services, the cost of protecting against the company's debt default over the next five years has doubled in recent months, reaching a peak of about 1.11 percentage points on Wednesday, equivalent to approximately $111,000 for every $10 million in principal. Barclays credit strategist Jigar Patel noted that with the influx of AI skeptics, the trading volume of Oracle CDS surged to about $5 billion over the seven weeks ending November 14, compared to just over $200 million in the same period last year. Matt Schrager, co-head of Automated Trading at TD Securities, pointed out, "As we often see in the market, liquidity begets liquidity; once the flywheel starts, it often keeps turning." Oracle's stock price also reflects growing investor concerns: from September 10 to this Wednesday's close, its market value has evaporated by about one-third. Oracle representatives declined to comment. It is important to clarify that few believe this company, which has investment ratings from all three major rating agencies and a market capitalization of $640 billion, will default anytime soon. Instead, it is believed that if investor confidence in AI wavers, Oracle's CDS will soar further, creating substantial profits for investors buying the derivative while offsetting their losses in the overall sell-off. Nvidia released better-than-expected revenue forecasts after the market closed on Wednesday, alleviating recent concerns about a slowdown in AI momentum. This prompted Oracle's CDS prices to fall back to around 1.09 percentage points by Thursday morning. Oracle is one of the largest investors in the AI field. It is a key participant in the "Stargate" program alongside OpenAI and SoftBank Group. Additionally, the company issued $18 billion in high-rated bonds in September, making it one of the largest corporate bond issuance transactions in the U.S. this year Morgan Stanley analysts wrote last month that they expect Oracle's adjusted net debt to more than double from about $100 billion to approximately $290 billion by fiscal year 2028, and they recommend that investors buy the company's five-year CDS and five-year bonds. JP Morgan strategists anticipate that companies may issue about $1.5 trillion in high-rated bonds for AI-related investments over the next few years. The bank noted that other markets, such as junk bonds and leveraged loans, will also see a surge of AI-related debt ### 相關股票 - [Oracle (ORCL.US)](https://longbridge.com/zh-HK/quote/ORCL.US.md) ## 相關資訊與研究 - [Oracle Targets Restaurant Industry With New AI Back Office Solution](https://longbridge.com/zh-HK/news/281171606.md) - [Oracle Data Center Nears $16 Billion in Financing](https://longbridge.com/zh-HK/news/281408478.md) - [MyDIGITAL, Oracle to train 300,000 Malaysians in AI skills](https://longbridge.com/zh-HK/news/281611528.md) - [Insig AI Plans Growth Drive and Eyes Nasdaq Dual Listing](https://longbridge.com/zh-HK/news/281311983.md) - [Oracle layoffs impact over 2,500 in India; 30,000 get pink slips globally](https://longbridge.com/zh-HK/news/281308451.md)