By Caleb Mutua
Publication Date: 2025-11-20 18:17:00
(Bloomberg) – Oracle Corp., the once stodgy database giant that has borrowed tens of billions and tied its fortunes to the artificial intelligence boom, is quickly becoming the credit market’s barometer of AI risk.
Traders have piled into the company’s credit default swaps in recent months as Oracle’s massive AI buying spree, its central role in a web of interconnected businesses and its weaker credit rating compared to players like Microsoft Corp. or Alphabet Inc., which have made contracts the market’s preferred way to hedge — and bet against — the AI boom.
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According to ICE Data Services, the price of protecting against a five-year corporate default has tripled in recent months, reaching as much as 1.11 percentage points per year on Wednesday, or about $111,000 per $10 million of protected capital.
As AI skeptics rushed in, the company’s CDS trading volume rose to about $5 billion during the year.
