AI Disruption in Software: A Credit Market Concern
As artificial intelligence continues to advance, concerns are mounting about its potential to disrupt the software industry, which constitutes a significant portion of the U.S. credit market. According to Morgan Stanley, software accounts for approximately 16% of the $1.5 trillion U.S. loan market, raising alarms about the stability of this sector amidst rapid technological changes.
The report highlights that a staggering 50% of software loans are rated “B- or lower,” indicating a higher risk of default. With nearly half of the software debt maturing in the next four years, the implications of AI disruption could pose serious refinancing risks for companies in this space. However, Morgan Stanley reassures that while price volatility in loans is expected, a near-term spike in defaults is unlikely.
As we navigate this evolving landscape, the question remains: how will companies adapt to the challenges posed by AI, and what strategies will they employ to mitigate risks in a potentially volatile credit market?
Original source: https://www.reuters.com/business/finance/ailed-software-selloff-may-pose-risk-15-trillion-us-credit-market-says-morgan-2026-02-10/