Cost of Insuring US Tech Giants' Debt Rises Amid the AI Infrastructure Race

According to a report carried by Ecoiran on Tuesday, 18 August 2026 (27 Mordad 1405), citing Bloomberg data and research from Bank of America, the credit default swap (CDS) spread on debt issued by US hyperscaler companies, including Amazon, Microsoft, Alphabet, Meta and Oracle, has risen noticeably since the start of this calendar year to about 70 basis points, above the average for US companies rated Investment Grade.

The report said the companies' massive spending on data centers and AI chips has strained their free cash flow, prompting debt markets to demand higher returns for taking on that credit risk. Bank of America projects the forward 12 month free cash flow of major chipmakers could reach about 430 billion dollars, while the hyperscalers' combined free cash flow has moved toward zero.