AI Debt Fears Hit Fresh Record Highs on Supply, Profit Concerns

Costs to protect the debt of numerous US technology heavyweights against default hit fresh record highs Friday, with disappointing quarterly reports from Intel Corp. and Amazon.com Inc. spurring fresh concerns on whether the massive borrowing binge financing the AI boom will pay off.

The protection price for Intel bonds for five years surged as much as 22.4 basis points Friday morning to 127.9 basis points a year, according to ICE Data Services. Both are records. The cost also reached a new high for chip rival Broadcom Inc. and levels last seen in early 2019 for Advanced Micro Devices Inc.

Amazon’s metric also hit its highest ever, climbing as much as 6.9 basis points to 94 basis points a year after reporting greater capital spending than anticipated and the slowest growth in the core e-commerce business in three years. Risk gauges for fellow hyperscalers Microsoft Inc., Alphabet Inc. and SpaceX also hit records Friday morning.

Weak tech results are deepening doubts over the AI borrowing boom even as tech giants boost their capital-spending plans. Companies have borrowed nearly $500 billion so far this year for data centers, chips and other AI projects, according to data compiled by Bloomberg. The total was about $200 billion for all of 2025.

Supply concerns are fueling a sharp repricing of risks, pushing prices for credit insurance to new highs and putting credit spreads at their widest in decades. Trading activity and risk outstanding have concurrently risen sharply, with AI-related borrowers now accounting for nearly 14% of Americas corporate single-name CDS open interest, up from 4% a year ago, Barclays Plc credit strategists wrote in a note on Friday.

Read more: High-Grade Tech Bond Spreads Are Weakest in Decades on AI Deluge

Some hyperscalers are starting to respond to the pressure across credit markets. Oracle Corp., whose CDS are the most actively traded, said earlier this week it would undertake just $20 billion of additional capital raises the next several years, including only $10 billion of gross debt. Its five-year CDS improved the most in nearly nine months following the announcement.

Meanwhile, Meta Platforms Inc. sold nearly $100 billion of equity market as part of capital-raising diversification. But there are expectations the social media giant might sell another round of bonds before 2027 arrives.

“Credit markets are not off the hook,” Barclays’ Brad Rogoff and Dominique Toublan said in Friday’s note. “Even with other funding avenues available, sizable public issuance remains ahead.”

Microsoft sold $25 billion of bonds on Thursday, its first sale since 2017, with demand getting as high as $115 billion. The longest-dated tranches widened as much as five basis points on Friday, according to Trace data as of 10:25 a.m. in New York, while the rest of the company’s newly minted debt was trading little changed.