FT News Briefing Investors hunt for protection against AI debt bust
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Dec 15, 2025 
Kate Duguid, U.S. markets editor at the Financial Times, dives into the surge of credit default swaps as investors seek protection against potential fallout from heavy AI-related borrowing. She explains how these swaps work and why investors are hedging rather than fleeing from AI stocks. Meanwhile, Michaela Tendera, an investigative journalist, sheds light on the challenges faced by UK whistleblowers, featuring compelling stories like that of George Patelis, who endured significant personal and professional repercussions after reporting misconduct.
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CDS Resurgence As AI-Debt Hedge
- Credit default swaps have resurfaced as a cheap way to hedge AI-related corporate debt risks.
- Trading in single-name CDS for firms like Oracle and Meta rose sharply as those companies announced record borrowing.
Borrowing For AI Sparks Market Worry
- Investors worry companies are borrowing heavily to build AI infrastructure they may not need.
- That worry drove a notable jump in CDS trading after big bond issuance announcements between September and November.
CDS Used As Portfolio Hedge, Not Default Bet
- Investors use CDS not because they expect defaults but to hedge heavy exposure to big tech stocks and bonds.
- CDS provided cheaper protection than shorting stock amid previously illiquid and mispriced contracts.