Oracle and CoreWeave CDS up 30% in a month, credit markets now betting against the AI boom. Imagine if Oracle went poof ala Enron style?

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CDS MARKET FLASHING WARNING SIGNS:

CDS spreads continue to surge for AI companies. Oracle, CoreWeave 10Y CDS spreads are up over 30% in the past month alone, with other major players also up double digits.

We are seeing a ton of heavy, upfront “capex” spending by these companies. Not only that, but these hyperscalers are tapping the credit market for this capital at a scale we haven’t truly seen before. The ultimate return on these investments is becoming more uncertain, hence investors are bidding up protection against the credit.

CNBC just laid it out clearly:
🇺🇸 US tech giants are expected to spend $700B on AI infrastructure by 2027.
🇨🇳 Chinese cloud firms? Less than $80B combined.

And yet, Chinese models like Kimi, Tongyi Qianwen, and Qwen are already neck-and-neck with top US models on standard benchmarks.

US model: borrow heavily, build big, scale fast.
China’s model: focus on efficiency, optimize infrastructure, iterate lean.

This isn’t a spending race, it’s a strategy duel.
And the smarter player may not be the one who spends the most.