Hyperscaler credit default swaps surge to 162bps, signaling rising default risks amid Korea’s worst equity rout in history.
The cost to insure debt tied to AI hyperscalers reached a record 162 basis points, up from 115bps, as Korea’s KOSPI index suffered its steepest two-day decline. The sell-off erased $620 billion in market value, triggered by circuit breakers and leveraged retail bets following SK Hynix’s earnings miss.
SK Hynix reported a 60.54 trillion Korean won profit but fell short of the 64 trillion won estimate, dragging down Samsung Electronics and nearly half the KOSPI. Hyperscaler CDS spreads now imply a 12% five-year default probability, with Oracle’s OpenAI exposure flagged as a key risk.
The Korean government convened an emergency meeting after the rout, which wiped 17% off the KOSPI in two sessions. The collapse reflects broader concerns over AI trade leverage and semiconductor demand.