Alphabet's debt risk indicators have risen, with its earnings report reigniting concerns about AI-induced debt.

Alphabet Inc. shares plunged on Thursday, with its five-year credit default swap (CDS) quote rising 5.3 basis points to 84 basis points, the largest increase since September 21. The company's disappointing performance earlier had heightened market concerns that its massive debt-funded artificial intelligence (AI) spending may not be recouped. Gavan Nolan, executive director of S&P Global Market Intelligence, said that if AI investments pay off, stock investors may reap huge gains, but if they worsen, bondholders will bear the losses.