Cost of insuring against AI company defaults spikes

The price of five-year default protection on $1 million of CoreWeave bonds rose from under $40,000 a year earlier to $100,000 as of October 15, Semafor reports. A $1 million policy against Oracle default cost $28,000, up 12% in a week. Investors are buying credit default swaps—contracts that protect against defaults—amid worries about the capital needed to scale AI and how quickly revenue will materialize.