Tech Giants' AI Bets Spark Debt, Hedging Concerns
Tech companies, including hyperscalers, are planning to borrow billions for AI investments, causing lenders to seek risk protection. Credit default swaps, akin to insurance, are gaining traction. Despite small trading activity, increased demand for these hedging instruments reflects the tech sectors dominance in capital markets. With investment-grade companies potentially issuing $1.5 trillion in bonds, recent massive bond sales tied to AI, and banks buying credit default swaps, the tech industrys rapid changes pose risks, as 95% of organizations report zero return from generative AI projects.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.