Credit Spreads on Big Tech Widen This Week as AI Capex Concerns Rise

According to CNBC, credit spreads on Alphabet, Amazon, and Meta widened this week as fixed-income investors demanded higher compensation to lend to companies with heavy AI capital spending plans. The move came after Alphabet raised its capex forecast, raising concerns that other hyperscalers could follow suit.

Rising energy costs are a major driver of the capex surge, as companies build large data centers across the U.S. Oil prices broke above $100 a barrel this week. Oracle's 5-year credit default swap traded at multi-year highs, serving as a proxy for broader AI infrastructure debt concerns. Analysts note hyperscalers are on track to collectively spend more on capex than they generate in free cash flow by next year.