Investors are buying credit-default swaps tied to AI-focused corporates to hedge portfolios against a potential unwind of the AI boom, driving sharply higher volumes. Corporates have boosted borrowing to fund trillions of dollars of AI infrastructure

2026-10-20

Investors are buying credit-default swaps tied to AI-focused corporates to hedge portfolios against a potential unwind of the AI boom, driving sharply higher volumes. Corporates have boosted borrowing to fund trillions of dollars of AI infrastructure, increasing demand for CDS protection, which pay out if referenced issuers default. Morgan Stanley research shows CDS linked to bonds from Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and NVIDIA averaged >$9bn/week in September versus