economy
February 13, 2026
AI disruption could spark a ‘shock to the system’ in credit markets, UBS analyst says
UBS analyst Matthew Mish told CNBC that the artificial intelligence transformation is happening faster than he and his colleagues had previously anticipated.
TL;DR
- Credit markets are expected to be the next area affected by AI disruption, following the stock market's reaction.
- Tens of billions in corporate loans, particularly from software and data services firms owned by private equity, may default due to the AI threat.
- UBS analyst Matthew Mish believes the market has been slow to recognize the rapid pace of AI disruption.
- A baseline scenario projects $75 billion to $120 billion in fresh defaults by the end of the year for leveraged loans and private credit.
- A more severe AI transition scenario could double these default estimates, leading to a credit crunch and a 'shock to the system'.
- Companies are categorized by AI's impact: creators of foundational models, investment-grade software firms, and highly indebted private equity-owned software/data companies, with the latter being most vulnerable.
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