The cost of insuring against a default by Oracle (ORCL.US) reached a new peak on Friday, as market anxieties intensify over the company's aggressive cash burn and the future profitability of its artificial intelligence investments. This comes particularly in the wake of a new Chinese AI model launch that could rival offerings from OpenAI.

Data from ICE Data Services shows the cost of using credit derivatives to protect against an Oracle default rose by approximately 10 basis points to 198.23, setting a new record closing high. This increase reflects investors demanding greater compensation to shield themselves from potential default risk on Oracle's debt. The previous record was 198.18, set on March 27.

Oracle is currently in a phase of massive investment in data centers, which has resulted in its operational free cash flow consistently remaining negative. Last week, S&P Global Ratings downgraded the company's credit rating to BBB-, placing it just one notch above speculative, or "junk," status. The rating agency indicated it had consistently underestimated the scale of upfront capital required for Oracle's AI investments.

In a related development, technology stocks faced broad pressure on Friday. This followed the launch of the Kimi K3 AI model by Chinese startup Moonshot AI, which sparked concerns that other models might be left behind in the competitive race.

Oracle holds approximately $117 billion in bonds within the Bloomberg US Corporate High Grade bond index, making it the largest issuer in the index outside of the financial sector.