From the AI companies that finance data center projects to the heavily indebted French government, the credit market is issuing warnings. As investors become more cautious about lending risks, market pressure is on the rise.

According to the analysis of CNBC on the data of FactSet, the credit default swaps (CDS) spreads for five years of CoreWeave, Oracle and SoftBank Group, as well as those for France and Italy (CDS), are all widening.

As market capital costs rise, bonds related to AI are being sold off due to increasing concerns about financing tightening. NVIDIA CEO Jensen Huang stated on Thursday regarding CNBC that the demand for Neocloud is "absolutely insane," but he warned of "scarce capital."

"The demand for capital far exceeds the supply of capital," he said, adding, "This issue will be resolved."

Countries such as France are also facing similar austerity measures. As investors demand more compensation for financing public debt, pressure on the bond market is increasing. Recent large-scale protests and riots in France have exacerbated market concerns.

FedWatch Advisors, the Chief Investment Officer and Founder, wrote in his article "French Neoclouds" published on Substack: "The market may no longer be willing to underwrite large-scale capital expenditures, high leverage, and uncertain future cash flows. This shift is also driving up French sovereign yield spreads, as investors demand more compensation for holding obligations from financially strained countries with longer maturities that are financed through debt."

The insurance costs for debts related to AI have increased.

CoreWeave, Oracle and SoftBank are at the core of the AI infrastructure construction, with their business covering data centers, cloud services, and financing.

Their five-year CDS spread provides a window into investors' concerns regarding overall costs and ultimate returns. The higher the spread, the greater the cost of default protection, which may also indicate that the market has stronger concerns about the borrowers' creditworthiness.

The increase in default protection costs for CoreWeave was the most significant. Data from FactSet shows that as of October 21st, its five-year CDS spread reached 1,065.84 basis points, reflecting an intensifying market concern regarding the high-debt company's ability to expand financing.

Meanwhile, on October 21st, the spread of Oracle rose to 308.25 basis points, higher than the 141 basis points on January 2nd. In July, Standard & Poor's Global Ratings downgraded the debt of Oracle to the lowest level of investment grade, citing its continuously expanding infrastructure business as increasing the overall credit risk.

SoftBank is an important AI investor, holding a large portion of shares in OpenAI, and has invested in data centers and power infrastructure, including a commitment to invest $87 billion in building data centers in France. Its five-year CDS interest rate spread approached a four-year high of 432 basis points on October 20th, higher than the 284 basis points on January 5th.

France's default protection costs have risen above Italy's.

France has not fallen into a full-blown debt crisis, but the market is sending out signs of unease: the cost of guarding against sovereign default has risen to levels higher than those of Italy, and Italy's related costs are also on the rise.

Analysis by CNBC shows that France's five-year credit default swap spread reached 89.8 basis points on October 21, higher than the 29.74 basis points on January 2. Italy's spread also rose to 67.1 basis points on October 22, an increase from 28.33 basis points on January 2. France's budget uncertainty and debt burden have become focal points, with markets concerned that the risks may spill over to other European countries.

The interest rate spread in Germany has also increased, but it remains significantly lower. On October 22nd, it was 12.15 basis points, compared to 7.47 basis points at the beginning of the period.

Macquarie Group's global foreign exchange and interest rate strategist Thierry Wizman pointed out that France's continuously rising debt burden and persistent fiscal deficit are the key drivers behind the increase in default protection costs.

Wizman to CNBC states: 'The key driving factors are France's large sovereign debt scale (120% of GDP) and the inability to reduce the deficit.' In contrast, the German government's debt accounts for 65% of that country's GDP.

Investors are still paying attention to the yield spread between French and German government bonds, which is regarded as a benchmark for European credit quality. This yield spread has also soared to 1.6 percentage points. The yield on French 10-year government bonds has also exceeded 5% for the first time since 2002. The 10-year yield spread between French OAT and German Bund refers to the additional compensation that investors require for holding French bonds rather than German bonds.

Although the spread between France and Germany is relatively wide, compared to the early 2010s during the eurozone debt crisis, the difference in borrowing costs within the eurozone at that time was much greater.

France will face another test on October 23, as Moody's is scheduled to review its Aa3 sovereign rating, which has a negative outlook. At this time of review, political divisions are complicating the efforts to repair the national finances.

Spillover effects on bond indices

Although there are already pressures in some areas of AI's financing, and the debt market is also factoring in higher costs. On October 19th, S&P Global warned that major cloud service providers may hold more AI-related debt exposures than is publicly recognized.

CDS Index provides a broader picture of credit market pressures by tracking the default protection costs of a basket of companies.

The CDX High Yield index in North America reflects the credit risk of speculative-level companies. LSEG data shows that its five-year interbank yield spread reached 355.35 basis points on October 20th, an increase of about 39 basis points from the end of 2025.

This expansion indicates that investors also demand more compensation for credit risks associated with borrowers other than AI.