Private Credit Markets Face AI Debt Exposure Challenge

The growth of AI and hyperscalers poses opportunities but also risks, accounting for as much as 30% of net new issuance this year in some indexes if you include Nvidia Corp. which this week attempted to calm credit markets by offering its computing power as a form of securitization. Neil Callanan of Bloomberg News warns that while systemic risk is not imminent, it could materialize if banks become overly exposed to the impact of residual value guarantees or if insurance products linked to the...