American multinational banking giant JPMorgan Chase has marked down the value of certain loans held by private-credit groups, apart from tightening its lending activities in the sector.
“The markdowns apply to loans made to software companies, which JPMorgan views as particularly vulnerable to disruption from artificial intelligence,” the Financial Times report stated, while quoting sources who said that the bank’s credit agreements for private credit space allow the financial venture to re-mark valuations based on the fund’s collateral if there is a market dislocation.
“The bank went through its financing portfolio, name by name and then sector by sector, and put different marks on loans such as those with underlying software exposure,” the sources said.
JPMorgan’s latest move comes amid growing concerns about deteriorating credit quality across the world, as artificial intelligence-led disruption in the software sector has triggered a wave of investor withdrawals from private credit vehicles, including BlackRock’s USD 26 billion “HPS Corporate Lending Fund.”
JPMorgan CEO Jamie Dimon reportedly told investors in the first week of March 2026 about the lender being “more prudent in lending” against software assets.
According to the FT, the reductions will limit how much the venture is willing to lend to private credit groups against those loans.
Private credits are the kind of loans that non-bank lenders issue to typically riskier borrowers or companies funding large buyouts. While these loans can be arranged quickly and serve borrowers too risky for banks, rising concerns over credit quality and exposure to software firms vulnerable to AI disruption have now created a cloud of uncertainty for the fast-growing market.
American software stocks and alternative asset managers are feeling the heat, as rapid AI model upgrades, along with specialised tools from firms such as Anthropic, have sparked fears of systemic disruption across labour-intensive sectors. These disruption fears are now driving up borrowing costs, with tech firms retreating from debt markets and lenders increasing their scrutiny.
Analysts are now forecasting a 3% to 5% spike in tech loan defaults through 2027. The private credit sector, as of now, stands very close to a liquidity test, as Blue Owl, BlackRock, and Blackstone restrict withdrawals after a surge in redemptions.
In fact, Swiss private equity firm Partners Group Chair Steffen Meister has even warned that default rates in private credit could double over the next few years, forcing lenders to bear the full downside of AI-driven economic disruption, while seeing only limited upside.
“Private credit would be disproportionately affected by the AI-driven economic disruption relative to private equity, as it would lead to a bifurcation of outcomes with more companies performing particularly well or badly,” the financial industry veteran said.
Discussing the USD 2 trillion industry, Meister said that while annual defaults in private credit averaged 2.6% over the past decade, low default rates ended up helping lenders to diversify loan portfolios that they have been leveraging again and again.