Credit-default swap prices for major tech firms like Microsoft, Nvidia, Meta, and Amazon have surged since fall 2025, in some cases more than doubling. The increases, even more pronounced for Oracle and Broadcom, signal growing investor concern that the AI boom may not generate returns sufficient to justify the industry’s massive borrowing binge. Credit default swaps (CDS) function as insurance on debt, protecting lenders against borrower default.
In 2026, tech giants including Amazon, Meta, and Alphabet’s Google have borrowed heavily to fund data-center expansion for AI. While blue-chip defaults are rare, sharp CDS rises historically signal broader debt worries, as seen before the 2008 crisis. Core Weave, a cloud computing firm, saw its stock slump after CDS pricing implied a 60%+ default risk. Total global CDS trading hit a record $41.8 trillion in 2025.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing