Oracle’s Credit Default Swaps Spike as AI Debt Concerns Test Investment-Grade Status
Oracle’s five-year credit default swap spreads have surged 287% in a year to 295 basis points, nearing high-yield levels. This spike reflects market anxiety over the company’s massive AI infrastructure debt, which includes $118 billion in long-term debt and a $300 billion OpenAI deal. While Oracle remains investment-grade, analysts warn that a downgrade to junk status could trigger forced sales and higher borrowing costs, potentially destabilizing the broader AI financing ecosystem.