Key Takeaways
- • Blackstone co-founder and CEO Stephen Schwarzman said the panic over software borrowers in private credit will look "way overdone" within a year or two, in a Bloomberg Leaders with Francine Lacqua interview released 25 October 2026.
- • Schwarzman said private credit funds are still generating roughly 9% returns and that defaults have risen "a little bit," arguing there is nothing dangerous in the sector.
- • Schwarzman did not name the hedge fund behind the software bankruptcy report; a post spreading the clip identified it as Citrini Research, whose scenario essay "The 2028 Global Intelligence Crisis" hit stocks in February, according to Business Insider.
- • Investors have sought to withdraw money from funds with large software exposure, as AI makes it harder to judge which software businesses will fall behind and private loans rarely trade, making values hard to observe.
- • Blackstone and other managers have limited withdrawals from some private credit funds, per Bloomberg.
Summary
Blackstone co-founder and CEO Stephen Schwarzman said the market panic over software borrowers in private credit will look "way overdone" within a year or two. Speaking on Bloomberg's Leaders with Francine Lacqua, released on 25 October 2026, he argued there is nothing dangerous in private credit, noting that "these funds are still generating roughly 9% returns, and defaults have gone up a little bit."
Schwarzman was responding to a warning that he said had unsettled markets. "There was a small hedge fund that published a report that panicked the market and said that basically every software company's going to go bankrupt in the next two years," he said. He did not name the firm. A post spreading the clip identified it as Citrini Research, whose scenario essay "The 2028 Global Intelligence Crisis" weighed on stocks in February, according to Business Insider. Schwarzman said he had spoken with the head of one of the three big AI companies, who called the bankruptcy thesis "absolutely absurd." Schwarzman quoted that executive: "We sell AI and tokens to these companies. They're going to be improving their businesses, and there'll be a certain percentage of software companies that are mispositioned for this new world." He concluded: "Once you panic people, it's tough to calm them down."
The underlying concern has not dissipated. Investors have been trying to pull money from funds with large software exposure, because AI makes it harder to determine which software businesses will fall behind, and private loans rarely trade, which makes their values harder to see. Blackstone and other managers have limited withdrawals from some private credit funds, Bloomberg noted in the episode. Schwarzman himself acknowledged that defaults have risen.
Schwarzman also said Blackstone's roughly $10 billion purchase of a data-centre business in 2021 has grown about 15 times, making it the world's largest data-centre owner. That figure is his own and was not independently verified in the source material.
Schwarzman was responding to a warning that he said had unsettled markets. "There was a small hedge fund that published a report that panicked the market and said that basically every software company's going to go bankrupt in the next two years," he said. He did not name the firm. A post spreading the clip identified it as Citrini Research, whose scenario essay "The 2028 Global Intelligence Crisis" weighed on stocks in February, according to Business Insider. Schwarzman said he had spoken with the head of one of the three big AI companies, who called the bankruptcy thesis "absolutely absurd." Schwarzman quoted that executive: "We sell AI and tokens to these companies. They're going to be improving their businesses, and there'll be a certain percentage of software companies that are mispositioned for this new world." He concluded: "Once you panic people, it's tough to calm them down."
The underlying concern has not dissipated. Investors have been trying to pull money from funds with large software exposure, because AI makes it harder to determine which software businesses will fall behind, and private loans rarely trade, which makes their values harder to see. Blackstone and other managers have limited withdrawals from some private credit funds, Bloomberg noted in the episode. Schwarzman himself acknowledged that defaults have risen.
Schwarzman also said Blackstone's roughly $10 billion purchase of a data-centre business in 2021 has grown about 15 times, making it the world's largest data-centre owner. That figure is his own and was not independently verified in the source material.
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