Oracle's Credit Default Risk Indicator (CDS) Soars to Historic Highs

On July 19, Oracle's credit risk indicator reached an all-time high, reflecting deep market concerns about the sustainability of the AI investment boom. According to ICE Data Services, Oracle's credit default swap (CDS) spread rose by approximately 10 basis points to 198.23 on Friday, marking a historic closing record that surpassed the previous peak of 198.18 set on March 27. This indicates that the cost for investors to protect Oracle's debt from default has risen to unprecedented levels. Oracle has about $117 billion in bonds within the Bloomberg U.S. Investment-Grade Corporate Bond Index, making it the largest company outside the financial sector in that index. Meanwhile, the release of the new AI model Kimi K3 has raised concerns about the competitiveness of existing AI products, putting overall pressure on tech stocks. The combination of these signals has further deepened market doubts regarding Oracle's aggressive capital expenditure strategy and the prospects for returns on its AI investments.