BREAKING: The AI Boom's Financing Structure Just Cracked
On December 12, 2025, Oracle's credit default swaps hit 151.3 basis points.
The highest since the 2008 global financial crisis.
For a company with $523 billion in contracted future revenues.
Here is what no one is telling you:
The AI infrastructure boom is not funded by profits. It is funded by the most elaborate circular financing structure in financial history.
OpenAI has committed $1.4 trillion in infrastructure spending over eight years while projecting $115 billion in cumulative losses through 2029.
Microsoft invests in OpenAI. OpenAI commits $250 billion to Microsoft Azure. OpenAI commits $300 billion to Oracle for data centers. Oracle borrows against those commitments. Nvidia invests in CoreWeave. CoreWeave uses that capital to buy Nvidia GPUs. The capital flows in circles.
Meanwhile, MIT research confirms 95 percent of enterprise AI pilots generate zero measurable profit impact.
CoreWeave's credit default swaps trade at 773 basis points. The credit market is pricing a 42 percent probability of default within five years for the company processing 62 percent of its business from Microsoft.
Oracle reported negative $10.3 billion in quarterly free cash flow. The company's stock has collapsed 47 percent from its September peak.
The equity markets are pricing AI as inevitable triumph.
The credit markets are pricing something else entirely.
The fiber optic boom of 1999 taught us that transformational technology and transformational investment returns are not the same thing. Utilization fell to 2.7 percent. Default rates hit 12.8 percent. Recovery rates collapsed to 16 percent.
The infrastructure survived. The investors did not.
December 12, 2025 may become the date when credit markets began pricing what equity markets could not see.
The circle must continue or it breaks entirely.
There is no partial failure mode.
Full Deep Dive Article - open.substack.com/pub/shanakaans
