{"id":65523,"date":"2026-07-28T03:38:14","date_gmt":"2026-07-28T07:38:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/big-tech-credit-risks-hit-record-highs-as-ai-spending-fears-mount-mercedes-benz-navigates-us-regulatory-threats\/65523\/"},"modified":"2026-07-28T03:38:14","modified_gmt":"2026-07-28T07:38:14","slug":"big-tech-credit-risks-hit-record-highs-as-ai-spending-fears-mount-mercedes-benz-navigates-us-regulatory-threats","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/big-tech-credit-risks-hit-record-highs-as-ai-spending-fears-mount-mercedes-benz-navigates-us-regulatory-threats\/65523\/","title":{"rendered":"Big Tech Credit Risks Hit Record Highs as AI Spending Fears Mount; Mercedes-Benz Navigates US Regulatory Threats"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Big Tech Credit Risk Surges:<\/strong> Credit Default Swap (CDS) premiums for AI leaders including <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) and Oracle (<a href=\"\/stock\/ORCL\">ORCL<\/a>) hit record highs as investors grow wary of massive, unproven AI capital expenditures.<\/li>\n<li><strong>Mercedes-Benz Under Pressure:<\/strong> CEO Ola K\u00e4llenius pledged to protect US interests as the company faces a potential ban under a new Senate bill targeting automakers with over <strong>15% Chinese ownership<\/strong>.<\/li>\n<li><strong>Meta Borrowing Hits &quot;Junk&quot; Levels:<\/strong> Financing costs for Meta Platforms (<a href=\"\/stock\/META\">META<\/a>)&#39;s latest <strong>$12 billion<\/strong> data center project reached yields typically reserved for <strong>B-rated (junk)<\/strong> bonds.<\/li>\n<li><strong>Germany Prepares for Trade Conflict:<\/strong> Berlin and Paris are drafting a &quot;roadmap&quot; to address Chinese trade imbalances, marking a significant shift in Germany&#39;s historically cautious stance toward Beijing.<\/li>\n<\/ul>\n<h2>AI Investment Fears Rattle Credit Markets<\/h2>\n<p>A &quot;crisis of confidence&quot; is sweeping through the bond market as the cost to insure against defaults by major technology firms reaches unprecedented levels. <strong>Credit Default Swap (CDS)<\/strong> premiums for <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) surged <strong>14 basis points<\/strong> in a single day to reach <strong>82 bps<\/strong>, the largest spike since late 2024. Analysts at <em>Soci\u00e9t\u00e9 G\u00e9n\u00e9rale<\/em> have warned investors to &quot;watch CDS, not EPS,&quot; suggesting that cash flow depletion from AI spending is now a more critical metric than earnings.<\/p>\n<p>Oracle (<a href=\"\/stock\/ORCL\">ORCL<\/a>) has become a primary bellwether for this risk, with its 5-year CDS premium hitting <strong>215 basis points<\/strong>, up from <strong>144 bps<\/strong> at the start of the year. The surge follows the company&#39;s announcement of a <strong>$70 billion<\/strong> investment plan for data centers, which prompted <em>S&amp;P Global Ratings<\/em> to downgrade Oracle&#39;s credit rating to <strong>BBB-<\/strong>, just one notch above junk status. Similarly, Alphabet (<a href=\"\/stock\/GOOGL\">GOOGL<\/a>) saw its CDS hit a record <strong>67 bps<\/strong> after reporting negative free cash flow for the first time in over two decades.<\/p>\n<h2>Mercedes-Benz Faces US Regulatory Crosshairs<\/h2>\n<p>Mercedes-Benz (<a href=\"\/stock\/MBG\">MBG<\/a>) is scrambling to address the <strong>Connected Vehicle Security Act of 2026<\/strong>, a bipartisan US bill that could effectively ban the automaker from the American market. The legislation proposes a <strong>15% cap<\/strong> on Chinese ownership for companies selling connected vehicles in the US. Mercedes currently exceeds this threshold, with nearly <strong>20%<\/strong> of its shares held by Chinese entities <strong>BAIC<\/strong> and <strong>Geely<\/strong>.<\/p>\n<p>CEO Ola K\u00e4llenius stated that the company will make necessary adjustments to comply with US regulations while ensuring that its extensive US operations\u2014including its <strong>Alabama manufacturing plant<\/strong>\u2014are protected. The company is reportedly lobbying the Senate to raise the ownership cap, arguing that its Chinese shareholders do not hold board seats or exert operational control. However, the <em>House Select Committee on China<\/em> has publicly opposed these requests, labeling the firm a &quot;Chinese-owned&quot; entity.<\/p>\n<h2>Germany Shifts Stance on China Trade<\/h2>\n<p>In a major policy pivot, Germany is mapping China\u2019s economic weaknesses in preparation for a potential trade war. Chancellor <strong>Friedrich Merz<\/strong> and French President <strong>Emmanuel Macron<\/strong> have tasked their respective cabinets with delivering a joint &quot;roadmap&quot; by September to tackle unfair trade practices. The move signals that Berlin is finally aligning with a tougher EU-wide stance against Chinese state subsidies and currency undervaluation.<\/p>\n<p>The shift comes as the EU officially branded China a &quot;critical long-term strategic challenge&quot; in a recent assessment. German officials are particularly concerned about the <strong>15th Five-Year Plan (2026-2030)<\/strong> from Beijing, which they view as a strategy to create permanent European dependency on Chinese supply chains. <em>Juergen Matthes<\/em> of the <em>German Economic Institute<\/em> described the new stance as a &quot;substantial and public change&quot; for a country that has long acted as a brake on EU protectionist measures.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Big Tech Credit Risk Surges: Credit Default Swap (CDS) premiums for AI leaders including Nvidia (NVDA) and Oracle 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