The AI Boom Takes a Page From the Housing Crisis

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:

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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.

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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…

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.

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:

Turn Your Images On

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.

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.

~ 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.

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.

Turn Your Images On

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…

Copper and resources are sending us a cleaner market signal than AI stocks.

Channeling Ludwig von Mises, we observe this morning that price is not just a number; it’s information. Price reflects what buyers and sellers collectively believe: demand, scarcity, fear, speculation, disappointment, future expectations and available supply.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

A low VIX does not predict disaster. It measures complacency. A serial skeptic will read it as the calm before a storm. We shook off that feeling this morning and opted to pursue an opportunity instead.

Here goes:

A VIX reading below 15 means the market is not pricing in much near-term trouble, even though there are obvious risks still sitting in the room: Iran, oil prices, memory chip speculation, circular financing, high valuations, epic high concentrations, spiking long-term interest rates, a regime change at the Fed, a meltdown in Japan and a historic deficit and rising national debt.

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.

We expect space, robotics and some more visible tech startups to remain sources of speculation. After weakness in the first half of 2026, we’re also due for a strong rotation of capital into natural resources, precious metals, critical minerals and energy.

Copper and resources are sending us a cleaner market signal than AI stocks.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

Here goes:

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.