Markets
July 28, 2026
Supplemental Security Income Pays July 31 & August Is the 3rd Month in 2026 With No SSI Check
- Big Tech AI spending is under scrutiny as AI infrastructure spending, rising corporate debt, Oracle AI spending, and growing AI spending concerns fuel investor caution
- Oracle’s $70 billion AI investment and record CDS costs highlight rising borrowing risks tied to aggressive AI expansion
- Investors are closely watching whether massive AI investments can deliver stronger cash flow and long-term returns
The advent of AI has helped transform the technology sector, but the growing obsession surrounding the technology is now drawing major concerns globally. Big Tech AI spending has become a major phenomenon, attracting scrutiny across the board. Investors are now questioning companies over their rising AI capex and whether such spending is justified. As per recent reports from the Financial Times, AI spending concerns are growing as investors continue to express skepticism over the AI infrastructure race and whether these massive investments will generate meaningful returns.
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AI Infrastructure Spending Tests Investor Confidence
Rising AI infrastructure spending has now become a major concern for global markets. As companies rapidly expand AI data centers, advanced chips, and cloud infrastructure to stay ahead in the AI race, AI spending concerns among investors are also reaching new levels. According to analysts, AI spending is now hitting record levels, outpacing the pace of revenue generation. This has become a legitimate concern for investors, who remain uncertain about whether such heavy investments will ultimately translate into sustainable profits and stronger cash flow.
According to the latest LSEG data, credit default swaps (CDS) tied to companies such as Alphabet, Amazon, Meta, SpaceX, Broadcom, Nvidia, and Oracle have climbed to record highs. The surge reflects growing concerns over Big Tech AI spending, as investors increasingly seek protection against potential credit downgrades while questioning whether these investments will deliver long-term returns.
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Oracle AI Spending Highlights Borrowing Risks
According to the report, LSEG data showed that Oracle AI spending has seen one of the sharpest increases in investor scrutiny. The company’s five-year CDS climbed to 215 basis points from 144 basis points at the start of the year, meaning investors now have to pay $215,000 annually to insure $10 million of Oracle debt against default.
Moreover, Oracle recently announced plans to invest $70 billion in expanding its AI data center footprint, inviting even more scrutiny over Big Tech AI spending. The announcement also prompted S&P Global Ratings to downgrade Oracle’s credit rating to BBB-, just one notch above junk status, citing uncertainty over when the company’s massive AI investments will begin generating stronger profitability and cash flow.
Corporate Debt Rises Alongside Big Tech AI Spending
The rapid expansion of Big Tech AI spending is also driving corporate debt higher as companies increasingly issue debt to finance long-term AI infrastructure projects. Rising corporate debt has prompted investors to closely monitor credit markets for signs of potential credit downgrades and higher borrowing costs rather than outright defaults.
Investors are also growing wary of whether these AI spending concerns will translate into meaningful returns in the near future, as companies continue to prioritize AI infrastructure over shareholder payouts.
According to Global Markets Investor , Big Tech’s AI spending boom is also reshaping capital allocation.
“Big Tech’s AI spending boom is draining its buyback machine. Quarterly share repurchases across Alphabet, Amazon, Meta, Microsoft, and Oracle collapsed to ~$9 billion, their lowest level in nearly a decade. This marks an over-80% decline since the 2021 peak of $50 billion. Big Tech firms have historically returned tens of billions of dollars to shareholders through buybacks, but the AI infrastructure race is forcing companies to redirect capital toward data centers, chips, and computing capacity. To put this into perspective, Alphabet alone has spent ~$280 billion on buybacks over the last five years, equivalent to more than 6% of its current market capitalization. The biggest market support over the last two decades is fading fast.”
As Big Tech AI spending continues to accelerate, investors are expected to remain focused on whether companies can balance aggressive AI expansion with sustainable profitability, making AI infrastructure investment, cash flow, and credit quality some of the market’s most closely watched metrics in the months ahead.
