Investors and technology executives are accelerating purchases of hedging instruments, including put options and credit-default swaps, as concerns mount over the sustainability of trillions of dollars in AI-related investments.
The Nasdaq Composite fell 2.9% Friday, recording its worst monthly performance since March 2025.
CoreWeave, a major AI infrastructure provider, has seen record trading volumes for put options in October. Popular contracts expiring in 2028 would profit if CoreWeave shares fall to $35, compared with approximately $55 recently.
The cost of insuring against defaults by Amazon, Alphabet, Microsoft, Meta and Oracle recently climbed to its highest level since 2021, according to bond data provider Solve. Oracle's credit-default swap spreads widened by more than one percentage point.
Jump Trading launched a computing-power trading desk offering derivatives to protect data center operators against falling chip rental prices. Rental rates for Nvidia B300 chips have increased approximately 56% this year to $7.56 per hour, according to Silicon Data.
Susquehanna International Group is receiving interest from data centers and private AI infrastructure providers seeking protection against semiconductor-related risks. Some proposed contracts would track computing-power indexes, potentially helping operators secure financing by limiting exposure to falling rental revenues.
Demand for protection remains relatively small compared with the broader AI investment boom.