Alphabet Inc. shares plummeted on Thursday as its debt default protection costs rose. The company's previous performance was disappointing, fueling market concerns that its huge debt-backed AI expenses might not pay off. According to ICE Data Services, the company's five-year credit default swap offer once rose 5.3 basis points to 84 basis points per year, the biggest increase since September 21. CDS will rise as investor concerns intensify. CDS from companies such as Meta Platforms Inc. and chip company Broadcom is also on the rise. Gavan Nolan, executive director of fixed income pricing at S&P Global Markets, said that if AI investments pay off, stock investors may reap huge profits; but if the situation worsens, bondholders will have to bear losses. He added that bond investors are paying close attention to capital expenditure and when AI business revenue can bring positive free cash flow.

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