[Wall Street 'Insures' AI Debt: Related Companies Raised $466 Billion This Year, Meta and NVIDIA CDS Costs Hit Record Highs] BlockBeats News, October 20 — As AI infrastructure development drives large-scale borrowing by tech companies, investors are increasingly allocating to credit default swaps (CDS) to hedge against related debt risks. According to Morgan Stanley, AI-related companies have issued approximately $466 billion in debt this year, 4.6 times the $101 billion issued during the same period last year. In September, the average weekly trading volume of CDS linked to Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, and NVIDIA bonds exceeded $9 billion, compared to less than $2 billion in July. The cost of credit protection for tech giants continues to climb. Meta's five-year CDS spread rose to 108 basis points, and NVIDIA's reached 101 basis points, both hitting record highs. Related metrics for Alphabet and Amazon also reached historic levels. Oracle's five-year CDS spread rose to 322 basis points, while SpaceX's reached 226 basis points. AI cloud service provider CoreWeave faces even greater pressure, with its five-year CDS spread surging to approximately 1,090 basis points, and some of its bonds falling into distressed debt territory. Analysts point out that the AI industry is highly leveraged, with close financial and operational ties between companies. The market is reassessing whether massive capital expenditures can translate into sufficient cash flow and profits. CDS and free cash flow have become key indicators for measuring AI investment risks, and related credit risks are spreading from individual companies to the entire AI industry chain. [Original Link]