Oracle default risk indicator (CDS) surges to a historical peak

Gelonghui July 19 — Oracle's credit risk indicators have reached historic highs, reflecting deep concerns in the market about the sustainability of the AI investment boom. According to ICE Data Services, Oracle's credit default swap (CDS) spread rose about 10 basis points on Friday to 198.23, setting a new all-time closing record and surpassing the previous peak of 198.18 set on March 27. This means that the cost for investors to protect Oracle's debt against default has risen to an unprecedented level. In the Bloomberg US High Grade Corporate Bond Index, Oracle holds approximately $117 billion in bonds, making it the largest non-financial company in the index.

Meanwhile, the launch of the new AI model Kimi K3 has triggered concerns about the competitiveness of existing AI products, putting pressure on technology stocks overall. The combination of these signals has deepened market skepticism over Oracle's aggressive capital expenditure strategy and the outlook for returns on AI investments.