Credit default swap (CDS) spreads for AI-related companies have reached unprecedented levels, with CoreWeave’s spread suggesting a 63% probability of default within five years. Oracle, SoftBank and CoreWeave are among the companies most affected by this deterioration in their credit risk. This situation contrasts with large tech firms like Amazon and Alphabet, which maintain substantial cash reserves. Investors are increasingly concerned about the costs associated with debt-funded AI expansion.
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