Key facts
- Oracle's five-year CDS spreads reached a record 288 bps.
- SoftBank's five-year CDS spreads reached 424 bps.
- CoreWeave's five-year CDS spreads exceeded 1000 bps.
- Oracle plans to raise $38 billion for data centers.
The cost of insuring against US tech defaults has hit record levels, signaling growing credit stress in the AI trade, particularly for data centers that depend on future revenue. Five-year credit default swap spreads for cloud computing giant Oracle widened by 26 basis points overnight to a record 288 bps, according to S&P Global Market Intelligence. Five-year spreads for AI investor SoftBank widened 24 bps to 424 bps. For data-centre operator CoreWeave, these spreads have blown out past 1000 bps, according to LSEG data. The surge in credit default swaps indicates that investors are seeking protection against potential defaults as AI companies borrow heavily to fund infrastructure, with Oracle planning to raise $38 billion for data centers.