Software Industry’s $100,000,000,000 Bill Comes Due As AI Spooks Investors

Fears that artificial intelligence could replace traditional software are showing up in the debt market.

The technology sector accounts for $54.4 billion of distressed leveraged loans, or 39 percent of the total, according to a Tuesday JPMorgan Chase & Co. report reviewed by Bloomberg. Software companies face challenges refinancing as more than $100 billion in debt comes due and artificial intelligence could disrupt their 💼Business.

JPMorgan strategists, including Nelson Jantzen, found that leveraged loans trading at or below 80 cents on the dollar, the threshold for distressed debt, now total $139.8 billion, Bloomberg reported. That figure has climbed almost 90 percent in the past year.

Roughly 141 issuers now have loans priced below that level, an increase of 35 from the year prior, the report showed. CDK Global, Qlik Technologies and Quest Software are among the software providers contributing the most to the total.

Software executives have dismissed the “SaaSpocalypse,” narrative, the idea that AI will kill software-as-a-service if companies task agents with building software tools instead of purchasing subscriptions.