Oracle's credit default swap spread now sits where it sat in 2008, according to Torsten Slok, chief economist at Apollo Global Management, who told CNBC on 26 July that hyperscaler spreads are rising off the bottom and that "the trend is certainly not your friend"1. A credit default swap prices insurance against a borrower failing to pay, which makes it the market's live estimate of default risk. Those spreads move faster than any rating agency does.
The leverage sits further down the chain. Mizuho analyst Vijay Rakesh flagged negative free cash flow, widening spreads and capital-raise risk at the smaller AI infrastructure lenders. Debt-to-equity runs near 739 times at CoreWeave, 172 at Applied Digital and 131 at Nebius, against roughly 18 at Alphabet2. Analysts quoted by CNBC expect US credit spreads to hold their range through the third quarter, then widen in the fourth and into 2027.
Oracle told the Securities and Exchange Commission in June that AI adoption had driven its workforce reductions, the clearest corporate admission this beat has recorded. The same company now prices as a default risk. Lenders could impose a capital-spending slowdown on their own, and that route reverses the AI-jobs story without a vote in Congress or a turn in the labour market. Lisa Cook raised widening software bond spreads as a stability concern in May, then left the point out of her July remarks.
