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Investors rush to insure against an AI boom unravelling

Published

Weekly trading in credit default swaps linked to bonds of firms such as Oracle, Alphabet and Nvidia averaged more than $9bn in September, up from less than $2bn in July, according to Morgan Stanley Research.

A credit default swap (CDS) pays out if a company fails to repay its debt. Investors buy them to protect their portfolios. The bonds linked to the swaps belong to Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia.

The cost of buying CDS on many AI-linked companies hit record highs this month. Investors buy the protection because they fear the AI boom could unravel. Their unease over borrowing to fund AI infrastructure appears to be growing, as that spending runs to trillions of dollars.

Key facts

Who
Ramsay Hodgson; Euan Healy; Morgan Stanley Research (source of trading volume data); Robert Dafforn (chief investment officer at Polus Capital)
What
More than $9bn of credit default swaps linked to bonds of Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia were traded on average each week in September, up from less than $2bn in July, according to Morgan Stanley Research. The cost of buying CDS on many AI-linked companies hit record highs this month.
When
20 October 2026
Status
Reported

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