UBS Warns of $75B+ in Corporate Loan Defaults Due to AI Disruption

Analyst predicts surge in defaults as AI development accelerates, impacting software and data services companies.

Published on Feb. 13, 2026

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According to UBS analyst Matthew Mish, the rapid development of artificial intelligence is poised to trigger a wave of corporate loan defaults, with estimates ranging from $75 billion to $120 billion by the end of the year. The companies most at risk are those in the software and data services industries, particularly those owned by private equity firms and carrying substantial debt. Mish warns of a potential 'credit crunch' if the AI transition is more sudden and severe than expected, leading to a broad repricing of leveraged credit and a systemic shock to the loan markets.

Why it matters

The looming AI-driven defaults could have significant ripple effects across the economy, impacting sectors beyond just software and technology. This underscores the pervasive nature of the AI revolution and its potential to reshape the economic landscape, with implications for investors, lenders, and policymakers.

The details

UBS analysis shows that technology accounts for roughly 24% of holdings in Business Development Company (BDC) portfolios, while business services represent around 30%. Mish categorizes companies into three groups: those creating foundational AI models, investment-grade software firms with strong balance sheets, and the heavily indebted, private equity-backed software and data services companies, which face the greatest risk. The situation could escalate beyond the baseline scenario, with Mish highlighting a 'tail risk' of a more sudden and severe AI transition that could double the estimated default rates.

  • The pace of AI development, driven by breakthroughs from companies like Anthropic and OpenAI, is accelerating the timeline for disruption.
  • Mish predicts a significant increase in defaults, estimating between $75 billion and $120 billion in fresh defaults by the finish of the year.

The players

Matthew Mish

A UBS analyst who predicts a significant increase in corporate loan defaults due to the disruptive impact of artificial intelligence.

Anthropic

An artificial intelligence company that is contributing to the accelerated pace of AI development.

OpenAI

An artificial intelligence research company that is also driving the rapid progress in AI technology.

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What they’re saying

“The market has been sluggish to react because they didn't really feel it was going to happen this fast. People are having to recalibrate the whole way that they look at evaluating credit for this disruption risk, because it's not a '27 or '28 issue.”

— Matthew Mish, UBS Analyst (CNBC)

“The knock-on effect will be that you will have a credit crunch in loan markets. You will have a broad repricing of leveraged credit, and you will have a shock to the system coming from credit.”

— Matthew Mish, UBS Analyst (CNBC)

What’s next

The situation will continue to unfold, and investors and lenders will need to closely monitor the impact of AI disruption on companies with high debt levels in vulnerable sectors.

The takeaway

The rapid development of artificial intelligence is poised to trigger a wave of corporate loan defaults, underscoring the pervasive nature of the AI revolution and its potential to reshape the economic landscape. Companies with high debt levels in sectors susceptible to AI automation are the most likely candidates for default, and the situation could escalate into a broader credit crunch if the transition is more sudden and severe than expected.