Private credit worries resurface in $3 trillion market as AI pressures software firms

February 9, 2026 - 04:39

The rapid ascent of artificial intelligence is casting a long shadow over the $3 trillion private credit market, reigniting fears of borrower distress and potential lender losses. As AI technologies disrupt traditional business models, software companies and other tech-focused firms that are heavily reliant on private debt are coming under unprecedented pressure.

Industry analysts warn that the very pace of AI advancement is the problem. Companies that borrowed extensively in recent years may now find their core products or services becoming rapidly obsolete. This technological displacement threatens their revenue streams and, consequently, their ability to service large debt obligations held by direct lenders, including private equity firms and specialized credit funds.

This dynamic introduces a new and complex risk variable for private credit portfolios, which have ballooned in size as banks retreated from leveraged lending. While the market has so far demonstrated resilience, the specter of AI-driven disruption suggests a coming wave of restructurings. Lenders are now tasked with meticulously scrutinizing how borrowers are adapting—or failing to adapt—to the AI revolution, with a particular focus on software and IT sectors. The situation underscores that in an era of breakneck technological change, yesterday's promising investment can quickly become tomorrow's credit challenge.