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I came across something over the weekend that crystallized a problem most investors are not paying attention to yet — but they should be.
Someone took an old version of QuickBooks, fed it to an AI agent and it reproduced the entire thing in Python and put it on GitHub as a working clone. A full accounting suite rebuilt from a 2003 binary.
Just like that.
It wasn’t a research lab or a team of engineers. A user who couldn’t reauthenticate an old license handed the files to an AI agent and watched it recreate the whole system. And here’s the punchline: AI is now pressuring margins, pricing power and even the relevance of some of these software products.
This coding stunt is a warning shot for an industry sitting on concentrated risk it does not fully appreciate.
The Concentration Problem Nobody Wants To Talk About
Software and software-as-a-service borrowers make up a large slice of private credit and business development company portfolios, and several analysts and market commentators have warned that these borrowers now account for a meaningful share of exposure in the space. It was easy to ignore when valuations were rising and subscription revenue looked solid.
But the world has changed. AI is attacking cost structures and compressing pricing power. Some products are losing relevance as automation undercuts what used to be defensible revenue streams. These are structural headwinds the original underwriting did not contemplate.
For years private credit was marketed as a reliable income engine for grown-ups. Banks stepped back after 2008, private lenders filled the gap, loans were made to middle-market companies without public market access and yields looked strong.
There’s another problem beneath the surface: Liquidity theater — a lot of these products hold loans that are hard to sell because there are no buyers.
And regulators have noticed. Reports indicate the U.S. Treasury Department is convening meetings with insurance regulators to discuss developments in the private credit market, emerging risks and the risk management practices that need to be implemented.
Welcome to 2026, Where the Robots Are Coming for Debt Service Coverage
If a borrower was underwritten with 2021 assumptions, 2026 is starting to look unforgiving. AI is not just disrupting software companies — it’s disrupting the numbers lenders assumed would stay stable. Debt service coverage ratios do not hold up when margins evaporate.
Loans in this asset class are not publicly traded, valuations are subjective and income streams look steady until they do not. The risk is that too much exposure sits in a sector facing technological disruption at the wrong moment.
Fear has its own market dynamics. Fear creates infrastructure demand. If this private credit mess becomes more tradable, more benchmarked or more hedgeable, then boring grown-ups who own toll roads start looking more attractive.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. My Mechanical Approach Totally Gets Rid of the Emotion
I’ve been giving out trade signals so straightforward you don’t even have room to overthink things.
And I have a lot more of these straightforward setups ripe for the taking.
If you’d like to get your hands on them…
