AI disruption threatens booming private credit market, investment chief warns

Recent AI advances have rattled markets and hit software companies particularly hard, prompting sharp share-price drops for public firms and delays to planned IPOs for private ones. That rout has raised worries that some software companies may struggle to service their debts.

Shares of Blue Owl Capital have fallen sharply this year after the firm halted withdrawals from a private debt fund, stoking fears about the private-credit market. "The concern is there's a lot of lax underwriting that has been taking place, particularly in the software community," said Ben McMillan, chief investment officer at IDX Advisors.

"They haven't gone to the public markets to get bonds because they probably wouldn't have gotten them.

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