Financial Times - Investors seek protection from risk of AI debt bust

As the market wakes up to the growing debt involved in AI expenditure, Portfolio Managers of the Altana Event Driven Credit Fund shared insights with the FT’s George Steer on Altana's short position against Oracle through its credit default swap.

“We don’t see Oracle defaulting anytime soon, but [the company’s CDS] were egregiously mispriced,” said Benedict Keim, a portfolio manager at asset manager Altana Wealth, which is betting against Oracle through its CDS.

Altana entered the trade in early October after assessing Oracle’s rising debt levels and reliance on one customer — ChatGPT maker OpenAI. “It was low-hanging fruit,” said Altana’s Mathieu Scemama.

You can read the full article here (subscription required)