The cost of insuring Oracle's debt against default has jumped to its highest level on record, with the company's five-year credit default swaps surging 70 basis points year-to-date to roughly 215 basis points — the largest increase among Big Tech names tracked by credit markets. Broadcom's five-year CDS has climbed as well, part of a broader pattern of investors demanding more protection against tech-sector debt tied to artificial intelligence spending.
Oracle sits at the center of the anxiety for a specific reason: its debt load has grown directly alongside its AI ambitions. Cryptopolitan reported that Oracle's shares have fallen more than 43% in the roughly ten months since September 2025, when the company signed a $300 billion cloud-computing deal with OpenAI. Oracle has since taken on an additional $38 billion in loans specifically to finance the data centers tied to that contract, and its credit rating now hovers just above junk status — a downgrade of even one notch would push Oracle's debt into speculative-grade territory.
The spread tells its own story
At 215 basis points, up from 144 at the start of the year, an investor now needs to pay roughly $215,000 annually to insure $10 million of Oracle debt against default — a level that reflects genuine market unease rather than routine hedging. Credit default swap activity across several major US tech companies has risen by roughly 90% since early September, with spreads deteriorating sharply across Alphabet, Amazon, Meta, Broadcom and SpaceX as well, several of which have hit their own record spreads in the process.
Moody's has already flagged the systemic angle
Ratings agency Moody's has separately warned that the unprecedented pace of AI infrastructure spending threatens the credit quality of Microsoft, Amazon, Alphabet, Meta, Oracle and CoreWeave collectively. Direct debt across those six companies now totals roughly $460 billion, with lease commitments — largely tied to data center capacity — adding another $1.2 trillion on top. That combination of on-balance-sheet debt and off-balance-sheet lease obligations is exactly the kind of leverage buildout that credit markets tend to price cautiously once growth assumptions come into question, and it echoes a broader theme in how large capital pools are reassessing where leverage-heavy growth bets sit relative to safer stores of value. See Bitwise's institutional case for Bitcoin for one version of that argument playing out in a different asset class.
Related: Bitwise CIO: Institutions Could Push Bitcoin to $1.3M by 2035
What would ease the pressure
Oracle's CDS spread would likely need either a credible signal that its OpenAI-linked revenue can service the new debt on schedule, or a broader cooling in AI capex anxiety across the sector, to reverse meaningfully from current levels. Until one of those materializes, the 215 basis-point mark stands as a fairly stark data point on just how much risk premium credit markets are now attaching to the AI buildout, even as the same companies keep reporting strong headline growth.
