The growing debt of Big Tech giants is boosting the market for credit derivatives, financial tools that help banks and investors protect against borrowers struggling to repay loans. A year ago, single-company credit derivatives for high-grade tech firms were rare. Now, contracts related to companies like Oracle, Meta Platforms, and Alphabet are some of the most traded in the U.S. outside finance, says Depository Trust & Clearing Corp. Recent weeks show more active trading on Meta and Alphabet contracts. About $895 million of Alphabet debt and $687 million of Meta debt have outstanding credit derivatives. AI investments, expected to cost more than $3 trillion and largely debt-funded, are driving this growth. Gregory Peters, co-chief investment officer at PGIM Fixed Income, said, "This hyperscaler thing is just so ginormous and there's so much more to come that it really begs the question of 'do you want to really be nakedly exposed?'" He explained broad credit protective indexes aren’t enough. Data shows six dealers quote Alphabet CDS for 2025 now, up from one last July, and Amazon CDS dealers increased from three to five. Some firms create baskets of credit derivatives covering several hyperscalers to match bond market trends. Trading activity surged last fall when debt needs of these firms made headlines. A Wall Street dealer mentioned his desk regularly quotes trades from $20 million to $50 million, trading volumes that barely existed a year ago. Banks underwriting hyperscaler loans buy single-name CDS to hedge risks tied to long loan distribution periods, sometimes extending from three to twelve months. Matt McQueen from Bank of America said, "As a result, you’re likely to see banks hedge some of that distribution risk in the CDS market." Wall Street dealers are eager to meet this rising demand. Paul Mutter, a former top banker, expects strong growth in basket hedges and targeted protections as private credit markets grow. Some hedge funds see opportunity in this demand. Saba Capital’s Andrew Weinberg called many CDS buyers "captive flow" clients such as lending desks. He added that tech companies' leverage is still low, so selling protection remains profitable. Weinberg said, "If there’s a tail risk scenario...the big companies with strong balance sheets...will outperform the general credit backdrop." However, some traders warn the rush to sell bonds might ignore rising risks. Rory Sandilands from Aegon said, "The sheer amount of potential debt suggests that these companies’ credit risk profiles could come under some pressure," noting his CDS trades have increased over the past year.