CoreWeave CDS premiums surge amid rising AI infrastructure debt

The credit default swap (CDS) premium for AI infrastructure firm CoreWeave has surged toward 1100 basis points, signaling heightened market concern regarding its credit risk. Reports indicate the market currently estimates a more than 60% probability of the company facing default within the next five years.

This spike in risk reflects broader trends in the artificial intelligence sector. Global AI-related debt in the bond market exceeded $450 billion in 2026, driven by massive investments in data centers and semiconductor infrastructure by major technology companies including Alphabet, Amazon, Meta, and Microsoft. While these large-scale firms maintain high credit ratings, the sheer volume of investment has caused some to experience negative free cash flow.

Unlike the 2008 financial crisis, which was rooted in subprime mortgage-backed securities and complex collateralized debt obligations (CDOs), current risks are tied to the heavy borrowing and cash flow requirements of AI infrastructure development. While the global CDS trading volume reached a record $41.8 trillion in 2025, analysts note that rising premiums do not inherently guarantee a systemic crisis, but rather reflect the increasing cost of insuring against potential defaults.