AI Borrowing Spree Pushes Credit-Insurance Prices on Oracle and Broadcom to Records, Bloomberg Reports

Bloomberg reported on 9 October 2026 that the rush to finance AI is “rattling investors in the more than $10 trillion US corporate market” [1]. One sign is the price of credit default swaps (CDS), a form of insurance against a borrower not paying its debts. TSN read Moneyweb’s copy [1].

What Bloomberg reported

Reported (Bloomberg). Oracle, Broadcom and SpaceX “are among the borrowers that priced nearly half a trillion dollars of new debt this year to pay for the infrastructure powering artificial intelligence, according to data compiled by Bloomberg” [1]. It adds: “Broadcom alone may raise about $600 billion to finance computing power in the coming years, according to Bloomberg calculations” [1]. That is Bloomberg’s calculation, not a plan Broadcom has announced. There have been “nine US high-grade deals that are $25 billion or above in size, the most ever” [1] (high-grade means borrowers rated as relatively safe).

On Thursday, Broadcom’s five-year CDS “widened by 3 basis points to a record 136 basis points”, according to ICE Data Services, and Oracle’s reached “a record close of 261 basis points” [1]. A basis point is one-hundredth of a percentage point, so 261 basis points means paying 2.61% a year of the amount insured.

Allspring’s Mark Clegg, a fixed-income trader, told Bloomberg: “Some days it feels like the market is holding an emergency meeting every few hours to reprice the size of the AI buildout” [1].

What the default figures mean

Bloomberg says credit derivatives were “climbing to prices that suggest traders see a growing risk of a default over the next five years. For Oracle, it’s now above 20%, for SpaceX it’s about 16%” and Nvidia “is given a more than 7% risk of default in that time” [1]. These are what CDS pricing implies, in Bloomberg’s wording: not a forecast, and not a chance anyone has said these companies have.

A credit default swap is, in the Bank of England’s words, “a contract intended to mitigate losses incurred by a creditor should the debtor fail to meet their obligations” [2]. The buyer pays a regular fee; the seller pays out if the borrower defaults. The fee rises when more people want protection. “Implied default risk” is a shortcut: it works back from the price to a default chance, using an assumed recovery rate (what lenders get back after a default). The European Central Bank gives the basic relationship as “CDS = PD x (1-RR)” [3]. Bloomberg’s copy does not give its method.

The price is not a pure default view. The ECB says spreads “should predominantly reflect” default assumptions, yet default probability “is not the only driving factor”, and a “liquidity premium” is part of asset prices [3]. The Bank of England notes CDS are used to hedge or “to take a speculative position” [2].

What this does not show

• CDS levels are market prices, not defaults. No company named has said it will fail to pay.
• Bloomberg says: “For now the issue is less about actual deterioration in credit quality than about market saturation” [1].
• The figures are Bloomberg’s own compilations. TSN could not check them independently.
• Not investment advice.

Earlier TSN coverage: Broadcom’s reported $50bn+ for OpenAI’s chip, and Oracle’s chip-financing talks, Broadcom and Anthropic’s chip debt and SpaceX’s reported $40bn Nvidia chip loan.

The Bottom Line

Bloomberg reports record CDS prices for Oracle and Broadcom as AI borrowing surges. The default percentages it cites are a market-price shortcut, not predictions.

Related on TSN: Broadcom Reportedly Arranging $50bn+ for OpenAI’s Custom Chip, as Oracle Seeks Its Own Chip Financing; Broadcom and Anthropic’s $60bn chip debt: supplier, lender and guarantor in one filing; SpaceX’s reported $40bn Nvidia chip loan: early talks, unnamed sources

Sources

1. Caleb Mutua, Preeti Singh and Laura Benitez, “AI borrowing spree hammers tech debt in rush to reprice risk”, Bloomberg News, 9 October 2026, as published by Moneyweb (syndicated copy, read in full; Bloomberg’s own page not read). https://www.moneyweb.co.za/news/markets/ai-borrowing-spree-hammers-tech-debt-in-rush-to-reprice-risk/
2. Evangelos Benos, Anne Wetherilt and Filip Zikes, “The structure and dynamics of the UK credit default swap market”, Bank of England Financial Stability Paper No. 25, November 2013 (central-bank paper; general explanation of CDS). https://www.bankofengland.co.uk/-/media/boe/files/financial-stability-paper/2013/the-structure-and-dynamics-of-the-uk-cds-market.pdf
3. European Central Bank, “Some lessons from the financial market turmoil for the use of market indicators in financial stability analysis”, Financial Stability Review, June 2009, Special Feature E (central-bank paper; general explanation of what CDS spreads reflect). https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart200906_05.en.pdf