Private Credit Stocks Keep Falling as Software Wipeout Spreads

The stock market rout this week that started in technology is quickly engulfing finance companies that invest in and lend to the software makers who are considered at risk from the development of artificial intelligence.

Alternative asset managers, investment banks and business development companies, or BDCs, are all taking a hit as investors flee software stocks after the newest AI tools from startup Anthropic sparked panic that companies from Oracle Corp. to Datadog Inc. to FactSet Research Systems Inc. are in danger. The fear is that the finance firms could be left with steep losses from sour loans tied to these software creators.