Credit default swops (CDS) are popular again in the financial markets. Taking insurance against the risk of AI-giants, unused data centers or chipmakers defaulting on their massive debts has been on top of the agenda in the Financial Times on 2026-10-21. The last time a similar run on CDS happened was related to the bank, then much bigger financial crisis about 20 years ago. Remember those days “Too big to fail” and the huge bill put on governments and tax payers subsequently. The drop on Wall street on Thursday 29th and Friday 30-10-2026 send shivers through the financial markets. There seems to be the opinion that we have witnessed the peak of the AI-hype towards the end of October 2026. In the New York Times (2026-10) there was already an article which advocated that if the AI technology is not viable as a private enterprise, it should be nationalized to guard against abuses and make sure the military applications could continue to be exploited at full potential as other superpowers might equally do so.
We all heard or read the warnings about the riskiness of such investments even when hedged through CDSs, it is about time to return to investments that do not primarily build on other people’s intellectual property.
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