Banks Hedge AI Tech Debt, Saba Capital Sells Protection
Update: 2025-11-17
Description
Banks are purchasing protection against potential losses from big tech companies like Oracle and Microsoft, as these firms take on more debt for AI investments. Saba Capital Management is selling credit derivatives to financial institutions concerned about AI sector debt. This move reflects growing concern about AI companies rapid expansion and increasing debt loads, with credit default swaps for Oracle and Alphabet at two-year highs. Despite these increases, overall risk remains relatively low compared to other industries.
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