Ripple Effect
The AI Boom Takes a Page From the Housing Crisis
July 27, 2026 • 3 minute, 18 second read
Debt issuance for the AI build-out has crossed $489 billion in 2026 alone. And with it, the return of a pre-2008 financial crisis bogeyman: Credit Default Swaps (CDS).
The rise in risk during the AI boom has a familiar pre-crisis smell, but it is not the same odor as the one that came off the mortgage market in 2008.
Each boom is slightly different; only the vehicle stays the same.
This time, the borrowing binge is not going into Florida condos or no-income-no-job (NINJA) mortgages. It is going into data centers, chips, power contracts, networking gear and the physical machinery of artificial intelligence.
Notably, Oracle and Meta are borrowing heavily to keep pace with the leading hyperscalers. And the cost of insuring that debt – through credit default swaps (CDS) – has risen.
Oracle’s five-year CDS spread has moved to multiyear highs as its debt and lease commitments have grown:
Credit default swaps on hyperscaler companies show increasing risk of default amid the AI buildout (Source: Zerohedge)
That does not mean investors think Oracle, Meta or the other hyperscalers are about to topple like Lehman.
The current anxiety is more specific.
In 2008, the central question was solvency. Borrowers could not pay. The collateral was mispriced. The loans were bad. The ratings were fiction wearing a necktie.
In 2026, the big AI borrowers still have enormous businesses, real revenues and tens of billions in free cash flow. The question is not whether they can survive next quarter. The question is whether they are spending hundreds of billions fast enough to outrun their own return on investment.
The CDS market is not shouting “default.” It is whispering, “What if the payoff takes longer than the PowerPoint said?”
The closer parallel to 2008 is concentration.
Then, the danger was hidden across mortgages, banks, structured products and balance sheets nobody fully understood.
Now, the danger is more visible but still narrow enough to matter. A handful of giant technology companies dominate the equity indexes, the AI story and an increasing share of corporate borrowing tied to the infrastructure buildout.
If investors sharply reprice AI debt, the shock would not need to come from a headline-grabbing bankruptcy like Lehman Bros. It will hit corporate bond portfolios, credit spreads, tech valuations and the entire retirement-account plumbing – 401(k)s, IRAs, Insurance and pension funds – underneath the market.
In this terrifying bull market, risk is not a housing-style house of cards. It is a very expensive data-center cathedral being financed on the assumption that the congregation will arrive on schedule… if at all.
Today’s Grey Swan Pro looks at a company with no credit default swap danger – because it has zero debt! It’s an asset-rich company that’s able to generate royalties on its assets and pass value on to shareholders — details here.
~ Addison
P.S. Today at 1:00 P.M. ET we’ll reveal a staggering opportunity we discovered after poring through President Trump’s financial disclosure released June 30th, 2026.
The President, it turns out, has 114,750,000 shares of one stock tucked away in a private trust. A single company on the Nasdaq that could make him the richest man on the planet. And from our vantage point now, he’s steering national policy directly toward those very shares.
No sitting president, in 250 years of the American presidency, has ever – so transparently – piloted the West Wing into positive investment gains. Until now.
You’ve already RSVP’d to attend my emergency briefing on Monday, July 27 at 1:00 P.M. ET.
During the briefing, we’ll address three critical topics…
FIRST, the mind-blowing technology behind Trump’s $1.1 billion investment, and why it could make him the richest man on the planet.
SECOND, why Trump built a mysterious “financial bunker” to protect his 114 + million shares. No sitting president has ever done anything so transparently before, and…
THIRD, the exact date that Trump’s shares could start booming. (Hint: we expect the share-price explosion to happen within a few hours of Monday’s briefing.)
Pay attention, more details to follow…
