AI capex surge widens tech credit spreads as investors demand higher yields

According to CNBC, investors are growing more uneasy about the capital required to fund the AI buildout, and credit spreads are widening for Google, Amazon and Meta as bond investors seek higher compensation. Yields rose this week after Alphabet lifted its capex forecast, while Mizuho said capex increases are testing investor limits and that hyperscalers are on track to spend more on capex than they generate in free cash flow by next year. Oracle's 5-year credit default swap is trading at a multi-year high, Barclays analyst Andrew Keches said it is being used as a hedge on AI capex and broader data-center spending, and S&P Global downgraded Oracle to BBB-. Meta is also looking to finance its $12 billion Texas data center, with pricing expected to be finalized early next week.