Ares Management, Blackstone Inc, and Blue Owl Capital have reassured investors that artificial intelligence poses no material threat to the performance of their software lending portfolios, despite rising market concerns over disruption risks, according to a report by Bloomberg as cited in Private Equity Wire. The firms used internal models and external assessments to evaluate AI exposure in their private credit books, with results indicating limited near-term risk and characterizations of portfolio vulnerability as ‘low,’ ‘medium,’ or ‘minimal.’ Most senior loan exposures remain structurally protected even in scenarios of business model disruption.
Firms’ Assessments of AI Exposure
Blackstone Inc applied an internal AI risk scoring framework to its flagship private credit portfolio, determining that fewer than 5% of holdings showed meaningful exposure to AI-related headwinds, while noting that a portion of its software investments could benefit from AI adoption. Ares Management reported that the vast majority of its software-linked investments were assessed as low risk, with only a small fraction classified as high risk following an external review, and highlighted that AI could enhance growth in certain areas. Executives at Ares stated that software borrowers are not uniformly exposed to disruption, as many companies are integrating AI tools into their products and operations, which supports revenue expansion rather than contraction.
Blue Owl’s Findings and Market Context
Blue Owl Capital conducted a portfolio review and concluded that exposure to AI-related disruption across its credit holdings is limited, with certain companies more likely to benefit from AI-driven efficiency gains than face displacement risk. This scrutiny arises amid increasing investor assessments of whether rapid AI advances could weaken traditional subscription-based and enterprise software models, as market participants struggle to quantify aggregate exposure due to inconsistent classification of software-related lending across funds. Analysts estimate that software represents a significant share of business development company lending portfolios, and actual exposure may be higher because of classification differences.
Protection in Lending Structures
Firms acknowledged that some companies could face pressure from technological change but emphasized that most lending is positioned higher in the capital structure, thereby limiting downside risk even in stressed scenarios. While widely known that private credit has grown rapidly in recent years as an alternative to traditional bank lending, these reassurances highlight specific evaluations of AI impacts in software sectors, according to Private Equity Wire.
