Goldman Sachs says redemptions in its private credit arm remain below peers as AI disruption fears rattle software lenders and alternative asset managers.
 |
| With lower redemption rates and reduced enterprise software exposure, Goldman Sachs argues its underwriting discipline may shield it from AI-driven turbulence in alternative lending. Image: CH |
Tech Desk — February 28, 2026:
Goldman Sachs is seeking to draw a line between itself and mounting turbulence in private credit markets, telling investors that redemption rates at its GS Credit platform remain comfortably below those of rivals—even as fears of artificial intelligence disruption ripple through the software sector.
In a letter to investors, the Wall Street firm said fourth-quarter redemptions stood at 3.5%, compared with more than 5% at peer firms. December inflows were 11% above the year-to-date average, signaling sustained demand despite growing unease across alternative asset markets.
The reassurance comes as private credit—now a roughly $2 trillion global asset class—faces a potential stress test from accelerating technological change.
For years, AI was framed as a productivity tailwind for software companies, enhancing margins and strengthening recurring revenue models that underpin much of private credit underwriting. That narrative is shifting.
Investors increasingly fear that generative AI tools are lowering development costs and barriers to entry, intensifying competition and threatening the pricing power of incumbent software firms. If earnings weaken, so too could borrowers’ ability to service debt—posing risks to lenders heavily exposed to the sector.
Goldman acknowledged that risk directly. The firm revealed it had been assessing AI disruption for years and passed on its first deal due to AI concerns as early as October 2023. In early 2025, it implemented a formal internal framework to evaluate AI-related disruption risk across its portfolio.
“We do not underestimate the risk of AI disruption,” the firm wrote, noting that AI’s ability to reduce development costs may increase competitive intensity for established software businesses.
Goldman disclosed that GS Credit’s exposure to enterprise software was approximately 15.5% at the end of the third quarter—toward the lower end of peer allocations. The firm emphasized its preference for businesses with “structural advantages and incumbency moats,” suggesting it is prioritizing borrowers it believes are more defensible in an AI-driven environment.
That positioning contrasts with volatility elsewhere in the market. Shares of alternative asset managers have come under pressure amid renewed concerns at Blue Owl over asset sales, compounding anxiety about redemption risks and liquidity management across business development companies (BDCs).
Private credit has flourished over the past decade as institutional investors searched for yield and banks pulled back from riskier lending. The sector has become a key financier of mid-market technology and software companies, whose predictable subscription revenues were long viewed as reliable collateral.
But AI’s rapid evolution is forcing a reassessment of those assumptions. If new entrants can develop competing products more cheaply and quickly, established firms may face margin compression and higher churn—challenging the durability of cash flows that underpin loan covenants and valuations.
As 2026 begins, private credit managers are navigating a confluence of volatile macroeconomic conditions, shifting capital flows between traded and non-traded BDCs, and accelerating technological disruption. Goldman’s message to investors is clear: disciplined underwriting and measured sector exposure may offer insulation from the storm.
Whether that discipline proves sufficient if AI reshapes the software landscape more dramatically remains an open question. For now, Goldman appears intent on signaling that while the AI shockwave may be real, its portfolio is built to withstand it.