Credit risk for tech giants hits fresh highs as AI debt piles up
Investors are bracing for another wave of bond sales from hyperscalers and chipmakers funding the artificial intelligence buildout.
Credit risk for tech giants hits fresh highs as AI debt piles up
Investors are bracing for another wave of bond sales from hyperscalers and chipmakers funding the artificial intelligence buildout.
Rising Tech Credit Risk Amid AI Expansion
Credit risk gauges for some of the biggest names in technology climbed to new highs on October 20, 2026, as investors braced for another wave of bond sales. Market participants are increasingly worried that a fresh round of debt issuance is coming and that the broader market may struggle to absorb it effectively.
The clearest warning sign comes from credit default swaps, which act as an insurance policy on a company's debt. When investors grow nervous about a borrower defaulting, the cost of that insurance rises accordingly.
Default Probabilities and Distressed Swaps
According to Cryptobriefing, Oracle currently carries an implied five-year default probability of over 20%, while SpaceX's sits at approximately 16%. CoreWeave, an artificial intelligence cloud provider, shows even more severe strain with its credit default swaps trading above 1,100 basis points.
This distressed level means that protecting debt against a CoreWeave default costs more than 11% of the insured amount per year. Consequently, tech credit ranks among the worst-performing sectors in the market, marked by significant volatility and elevated trading volumes.
Massive Borrowing and Ratings Warnings
Firms including Oracle, Broadcom, and SpaceX have collectively issued nearly $500 billion in new debt throughout 2026 to finance artificial intelligence infrastructure. Combined capital expenditure across these companies is anticipated to exceed $1 trillion from 2025 to 2026.
Furthermore, S&P Global has issued an alert regarding under-recognized liabilities linked to the artificial intelligence buildout. This warning raises the possibility that some obligations are not fully reflected in how companies are currently assessed by the market.
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