Investors reassess risks as AI financing rattles tech companies

The AI boom has a financing problem, and the bond market has started saying so out loud. Investors are paying more to insure against defaults at some of the biggest names in tech, according to an October 8, 2026 Bloomberg report.

The trigger is debt, and lots of it. Companies including Oracle, Broadcom and SpaceX have priced nearly $500 billion in new AI-related borrowing in 2026 alone.

The cost of insurance is climbing

Credit default swaps, or CDS, work a lot like an insurance policy on a company’s debt. A buyer pays a regular premium, and if the borrower defaults, the seller covers the loss.

Broadcom’s five-year CDS widened to a record 136 basis points on October 8 and 9, 2026. A basis point is one hundredth of a percentage point, so that spread works out to about 1.36% of the insured amount per year.

Oracle’s numbers look even heavier. Its CDS hit fresh highs near 261 basis points, putting it at the front of the line in tech credit anxiety.

Those spreads can be translated into rough odds of default. As of early October 2026, five-year CDS pricing implied a default probability above 20% for Oracle.

SpaceX came in at about 16% on the same measure. Nvidia, arguably the poster child of the AI rally, showed an implied probability of more than 7%.

Tech credit has been among the worst-performing sectors recently, and trading volumes in both bonds and credit derivatives have jumped sharply.

How the AI spending spree got here

The borrowing binge sits on top of an enormous capital spending plan. AI-related capital expenditures by leading tech firms are expected to surpass $1 trillion across 2025 and 2026.

Oracle is reportedly in discussions with Apollo and Goldman Sachs over financing tied to a major chip purchase.

The stakes extend well beyond a handful of household names. The concerns put a spotlight on risks across more than $10 trillion of US corporate credit, according to the research behind the Bloomberg report.

What this means for investors and the tech sector

The core tension is timing. Companies are borrowing now against AI revenue they expect later, and the credit market is starting to question whether those two timelines will line up.

Equity investors have mostly been willing to give AI spenders the benefit of the doubt. Credit investors are wired differently: they do not share in the upside, so they care far more about getting paid back.

Oracle is the name to watch most closely. Its spreads are the widest among the major players, and the outcome of its reported talks with Apollo and Goldman Sachs will signal how much appetite lenders still have for large, chip-heavy financing deals.

Broadcom’s record spread is notable for a different reason. It suggests the anxiety is spreading from the most aggressive borrowers to companies that investors previously treated as relatively safe bets on AI demand.

The broader risk is that traditional credit metrics may not fully capture what is happening. Historical leverage ratios and coverage figures were built for businesses with predictable revenue, not for multi-year bets on a technology whose payoff is still being priced.

Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.