If you remember the film “The Big Short” (or, more likely, get served 60-second clips of it regularly on YouTube Shorts), then you’ll probably remember the term “credit default swap.” It’s the tool that Michael Burry—who, notably, is currently shorting some major tech stocks—and others used to bet against the housing market. That same tool is becoming a popular hedge against the AI boom, according to a report from the Financial Times.

Purchase of these insurance policies has skyrocketed, jumping 90% since the start of September, according to data that FT pulled from the clearinghouse Depository Trust & Clearing Corporation. Prior to this fall, the credit default swap market on tech firms sat steady at about $2 billion in volume per month. In December, it looks primed to surpass $8 billion.

The credit default swaps have reportedly primarily targeted hyperscalers. Meta has reportedly become a trendy CDS target, per FT, as the company has struggled to find its footing in the AI space after lighting money on fire pursuing the metaverse. But the biggest targets are apparently cloud giant Oracle and the upstart CoreWeave, which was recently described by The Verge as “the AI industry’s ticking time bomb.”

Oracle appears positioned as the most popular target of hedging, which makes sense given that its lofty stock price feels the most fundamentally removed from the reality of its underlying books. During its September earnings report, the company missed on its revenue and earnings projections and posted flat net income year-over-year. Despite that, the company’s stock soared because it had stacked some massive remaining performance obligations—financial agreements that will provide revenue that have not yet been fulfilled. It had a projected $455 billion coming in, mostly tied to data center agreements with OpenAI. On Friday, the company announced delays to those data center projects, which sent the entire AI sector into a panic and triggered a bit of a sell-off. Seems at least some of the market has realized that something doesn’t smell right with Oracle, as FT reported the weekly CDS trading volume for the company has tripled this year.

As a reminder of how these instruments work, credit default swaps are effectively an insurance policy against an investment. The purchaser pays premiums to a protection seller, which pays out if a borrower defaults on a loan. And it seems fear of default is building on Wall Street. Hedge fund Bridgewater Associates recently warned in a note to investors that there is a “reasonable probability that we will soon find ourselves in a bubble” with AI investments. The fact that a not-insignificant portion of the market is now looking for ways to profit should it pop probably does not bode well for where things are headed.