Oracle’s $3.5 billion bond has dropped by 8% since its peak, now trading at just 65 cents on the dollar. This decline signals growing investor unease over Big Tech’s massive borrowing to fund artificial intelligence infrastructure. According to Bank of America analysts, Oracle’s credit risk has widened faster than the overall investment-grade market, with five-year credit default swaps reaching 80 basis points – the highest in about two years.
The widening spreads reflect concerns that tech companies may not have enough cash to finance their “AI capex arms race.” Despite some AI bubble concerns, financial conditions remain loose due to lower interest rates and a rally in risk assets. However, investors are becoming increasingly cautious, as evidenced by Meta’s recent debt issuance being four times oversubscribed two weeks ago.
This drop in demand could indicate that investors are reevaluating the risks of investing in AI buildouts without clear returns on investment. As Big Tech stocks experience a selloff, it may signal that investors are questioning the sustainability of these massive borrowing sprees.
Source: https://www.axios.com/2025/11/17/big-tech-debt-oracle