"The AI industry accounted for more than a third of private credit deals in 2025, up from 17% over the previous five years, indicating a significant shift in borrowing patterns."
"A sharp correction in asset valuations, which have increased rapidly, could lead to sizeable credit losses to private credit investors, particularly in the AI sector."
"Concerns over potentially risky loans arranged by private credit firms have led to a multibillion-pound surge in withdrawals, forcing some funds to limit client access to their investments."
The Financial Stability Board warns that the private credit industry's involvement in the AI sector could result in substantial losses. AI firms have increasingly borrowed from private lenders, with the AI industry representing over a third of private credit deals in 2025. This concentration in specific sectors raises concerns about exposure to unique risks and potential asset valuation corrections. A significant shortfall in electricity supply could delay AI projects, while an oversupply of datacentres may lead to lower returns for investors, exacerbating risks in private credit investments.
Read at www.theguardian.com
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