A $3 trillion market stirs again: AI impacts the software industry, private credit concerns reignite

Last week, after the artificial intelligence (AI) company Anthropic released its next-generation AI tools, the software industry came under pressure again, triggering a sell-off in the stock prices of software data providers. The tools developed by Anthropic are designed to perform many complex professional tasks that software companies currently charge for, raising market concerns about AI potentially undermining traditional software business models. Last week, asset management companies with large private credit businesses saw their stock prices decline, as investors worried that AI could disrupt borrowers' business models, squeeze cash flows, and ultimately raise default risks. Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, KKR declined nearly 10%, and TPG fell about 7%. In contrast, the S&P 500 index only dipped 0.1%, while the tech-heavy Nasdaq index dropped 1.8%