CVC And Its Leveraged Investments In AI

 

CVC Capital Partners, CVC, the leading European private equity, private credit, secondaries and infrastructure asset manager has invested large part of its newly raised private equity, private credit, secondaries and infrastructure assets into artificial intelligence, AI related technology companies, AI related energy companies, and AI data center infrastructure projects.

Much of the private credit raised by CVC goes to fund loans for leveraged buyouts of technology companies. Leveraged buyout deals are leveraged since alternative asset managers like CVC secure around 30 % of the funds needed to buy out the technology firm in equity and the rest is borrowed by bank lending or high yield bonds.

CVC and most other leading technology companies use the private credit funds they have raised to fund the leveraged buyout debt portion. This puts additional leverage in the technology buy out deals. Many of the technology companies CVC and other leading private equity firms invest in are AI companies.

Finally, like most technology investments AI companies are operationally leveraged, because AI and technology in general insures high scalability without billions of USDs in initial investments in land, factories and infrastructure.That said, AI has recently become quite a capital intensive business, since to run and produce AI Microsoft, Alphabet, Amazon and Meta have each invested  30 billion USDs in 2025 only in AI data center and cloud computing related infrastructure.

So, CVC is double if not triple leveraged in its investments in AI technology companies via its private equity, private credit, secondaries and infrastructure funds. This large leverage magnifies gains but also increases losses multiple fold on the downside for CVC's investments.

In an AI positive case CVC's market capitalization could rise to 45 EURs. However, if the AI booms turns into bust and drags the Nasdaq 65 % from its peak, CVC's market capitalization could fall to 8 billion EURs from CVC's current 15.94 billion EUR market capitalization, according to Wolfteam Ltd.'s projections and estimates.

 

Are The AI Hyperscalers Turning Into Capital Intensive Businesses?

 

Technology companies are usually regarded as capital light, operationally leveraged.

Exception are companies like Intel, AMD, NVIDIA, Broadcom and other computer chip and equipment producers.

The hyperscalers AI companies Microsoft, Alphabet, Amazon and Meta are also regarded as not hugely capital intensive businesses. Which makes them trade at relatively high both individual and sector software Price/Earnings, Price/Book and Price/Sales ratio.

Recently, however, Microsoft, Alphabet, Amazon and Meta have all invested tens of billions if USDs in AI data center infrastructure. Microsoft, Alphabet, Amazon and Meta have each invested more than 20 billion USDs in AI data centers in 2025.

Does this turn the hyperscalers into slower, capital intensive businesses?

Not currently. Microsoft, Alphabet, Amazon and Meta still remain agile, fast moving and fast growing be they mega cap companies each worth more than 1.5 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI simply develops very fast and compensates for the billions of USDs of capital outlays. 

Carlyle And Its Leveraged Investments In AI

 

Carlyle Group Inc, the fourth largest listed private equity, private credit, real estate and infrastructure group and the second largest private credit alternative asset manager in terms of managed private credit assets in the world, has invested a large part of its newly raised private credit funds in loans to mid and large capitalization artificial intelligence, AI technology companies, private equity buyouts of AI technology companies and lending to buy and invest in AI data centers and AI energy infrastructure.

The private credit loans in which Carlyle is most active in giving out to AI technology firms carry interest rates of usually 7 % to 15 %. By giving out private credit to AI firms Carlyle essentially takes on financial leverage, because at such high interest rates the tens of billions of USDs of private credit loans Carlyle disburses each recent year could be completely wiped out since they are high on the capital structure of the AI technology firms that receive these very high interest of 7 % to 15 % loans. Since Carlyle is the second largest alternative asset manager in terms of private credit assets under management in the world managing 208 billion USDs in private credit, this makes Carlyle deeply financially leveraged on the AI technology sector.

Carlyle also makes billions of USDs of private equity buyouts of technology firms a year. Since only 30 % of these investments is via an equity down payment and the rest is borrowed debt via bank lending and high yield bonds, Carlyle's private equity investments are also leveraged.

Artificial technology, AI as most technology investments is operationally leveraged. That said, the leading hyperscalers Amazon, Microsoft, Alphabet and Meta are investing circa 25 billions USDs a year in AI data center infrastructure, which makes them a capital intensive business. A similar capital intensive AI investments trend is observed in mid sized AI technology firms. That said, AI technology still provides operational leverage. And AI firms are still valued as not capital intensive technology firms by Wall Street equity research analysts and investors and Silicon valley technology investors and technologists.

So Carlyle is double leveraged via financial borrowing leverage and technology operational leverage on AI in its assets under management investments.

If the AI boom continues to flourish, Carlyle's market capitalization could reach 109 billion USDs.

If the AI boom turns into a bust and the Nasdaq Composite falls more than 62 % from its recent peak, Carlyle's market capitalization could fall to 9 billion USDs from the current 23.65 billion USDs Carlyle market capitalization. , according to Wolfteam Ltd.'s projections and estimates.

 

Apollo And Its Leveraged Investments In AI

 

Apollo, the third largest private equity, private credit, real estate and infrastructure asset management firm has invested large part of its newly raised assets in the last 5 years in artificial intelligence, AI technology firms via private equity buyouts, private credit lending at interest rates of 7 % to 15 % to mid and large technology companies, real estate AI data centers investments and AI energy infrastructure investments.

Apollo's AI technology firms private equity buyouts are leveraged since only about 30 % of the investments is via equity down payment, the rest circa 70 % are sourced via high yield bonds or bank lending, which makes the private equity AI technology firm buyout an essentially leveraged 2.3:1 investment from Apollo's private equity assets under management.

Apollo gives out private credit loans at interest rates of 7 % to 15 % to mid sized technology companies, which makes for a financially leveraged investment.

Apollo's real estate AI data centers investment are usually done with additional leverage in the form of bank loans and high yield debt.

Apollo's AI energy infrastructure investments are also financed in part via leveraged bank lending and high yield bonds.

Add to that, that artificial intelligence, AI firms are operationally leveraged on the AI technology. That said, lately AI technology firms are becoming very capital intensive as they build out data center infrastructure.

So in short, large part of Apollo's assets under management invested in artificial intelligence, AI are essentially double leveraged.

If the AI's boom continues, Apollo's market capitalization could rise to 203 billion USDs.

If on the other hand, AI turns out to be a bubble and it bursts dragging the Nasdaq Composite more than 65 % from its peak, Apollo's market capitalization could fall to 40 billion USDs, from Apollo's current market capitalization of 86.33 billion USDs., according to Wolfteam Ltd.'s projections and estimates.

KKR And Its Leveraged Investments In AI

KKR & Co Inc, KKR the second largest private equity, private credit, real estate, infrastructure asset management firm in the world invests large part of its newly raised assets in artificial intelligence, AI technology related investments.

Also large part of KKR's newly raised assets in the last 7 years have been invested in AI technology related assets like private equity leveraged buyouts of AI technology companies, private credit lending to AI technology companies, investing in AI data centers real estate and energy companies AI related infrastructure.

The KKR private equity AI buyouts are leveraged, because only around 30 % of the deals are financed with equity down payment, the rest is debt via high yield bonds or bank lending. The KKR private credits to AI technology companies are also essentially leveraged since the private credits are given out at 7 % to 15 % interest rates. There is also secularization investing. KKR's real estate AI data centers and AI related investments are also leveraged because they are usually to a large extent financed with debt.

On top of that all AI technology investments are operationally leveraged since usually little hard assets are needed and the initial amount of capital is not great. With the advent of AI data centers, however, such businesses are becoming very capital intensive.

That said, AI is still operationally leveraged.

KKR has made a large, concentrated bet on AI. Since the investments of KKR in AI are double leveraged, once using borrowed financial means to invest in AI, the second part AI is operationally leveraged, if it wins, KKR stands to win big.

In an artificial intelligence, AI positive case, KKR's market capitalization could reach 302 billion USDs.

If on the other hand the current AI boom turns out to be a bubble and bursts with the Nasdaq Composite falling from peak to trough more than 65 %, KKR's market capitalization could fall to 50 billion USDs, from KKR's current 118 billion USDs market capitalization, according to Wolfteam Ltd.'s projections and estimates.

 

Blackstone And Its Leveraged Investments In AI

 

Blackstone, the worlds largest private equity, private credit, real estate, infrastructure asset manager has invested large part of its newly raised funds in artificial intelligence, AI data center projects, AI technology companies and AI related energy and infrastructure companies.

Many of those investments were made via leveraged buyouts, which means putting up circa 30 % of equity and borrowing in debt and high yields bonds the rest 70 % to purchase an AI technology buyout company via a leveraged buyout. Private credit lending to artificial intelligence, AI also entails leverage, since the private credit loans are usually made with 7 % to 15 % interest rates and automatically make the companies quasi distressed, since according to credit agencies companies that borrow via high yield loans with interest rates between 7 % and 15 % are usually with sub investment credit rating. The artificial intelligence, AI real estate and infrastructure investments of Blackstone's assets under management and own proprietary funds are also leveraged, because they entail taking on debt and/or high yield loans to buy the AI related real estate and infrastructure assets, to magnify the prospected returns.

Add to that the fact the artificial intelligence, AI companies are operationally leveraged, meaning they usually require small initial investments in hard assets and magnify returns by leveraging usually know how and technology.

In short, Blackstone's investments of its assets under management and proprietary funds in private equity buyouts, private credit lending, real estate and infrastructure assets purchasing are essentially double leveraged. This double leverage magnifies potential returns, but also could double potential losses in Blackstone's investments portfolio, according to Wolfteam Ltd.'s projections and estimates.

That said, the artificial intelligence, AI boom is in full swing and will continue with small corrections in the next 3 years according to Wolfteam Ltd.'s current projections and estimates.

Which means Blackstone's leveraged investments in artificial intelligence, AI related companies will continue to produce double leveraged returns and stand to beat the S&P 500 as private equity has largely done in the last 15 years, since the AI boom began in 2011 - 2015.

If there is a sharp drop in AI related technology companies' stocks, though, for example 30 % fall as measured by the Nasdaq Composite, Blackstone's returns on its AI related investments could realize 40 % losses. That said, however, a still bigger part of Blackstone's assets under management is invested in stable, positive cash flow, dividend producing companies which will mitigate the possible negative AI effect on Blackstone, altogether.

In short, Blackstone is undervalued and Blackstone's market capitalization could double from current levels in the next 4 years, according to Wolfteam Ltd.'s projections.

If there is an AI related stocks fall of 30 %, however, Blackstone's market capitalization could fall 55 % from current levels.

Private Equity And High Yield Debt

 

A large part of the companies bought by private equity are with low or distressed ratings, according to various publications.

The percentage varies but the the top 15 private equity companies in the world have between 5 % and 32 % of the companies in their portfolios with low or distressed ratings.

The reason is twofold. Whey Blackstone, KKR, Apollo, Carlyle, Ares, Bain Capital, TPG, Warburg Pincus, CVC, etc. leading private equity firms buy a company they use only 30 % in equity and the rest is in debt. This makes for them buying many high risk companies in the first place.

In addition, the private equity companies usually take out additional debt for their portfolio companies and load them up with debt. The higher debt levels naturally decrease the credit ratings of many of the private equity portfolio companies sometimes to distressed levels even.

So, in short private equity to a large part is a high yield business, which entails above moderate risk.

Private equity companies mitigate the risks by buying mature businesses, which can endure the high debt load.

In addition, private equity companies strive to make their portfolio companies run better, with better management which improves their durability.

And private equity often do substantive job cuts in their portfolio companies.

All this makes for the fact that private equity is a leveraged business and it tends to outperform the economy and the stock market in boom times. And do worse in recessions.

In the last rolling year, however, the largest listed private equity companies Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC underperformed the S&P 500 even though the S&P 500 clocked in a 16.5 % gain for 2025.

Part of the reason is the high interest rate environment in the US and the valuation concerns of investors about artificial intelligence, AI technology companies in which the leading private equity firms have invested heavily and makes them leveraged once on the AI technology, which is an operationally leveraged business and second the leveraged nature of the private equity buyout investments Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. have done.

So Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, etc. leading private equity firms could outperform the S&P 500 in 2026 if artificial intelligence, AI continues to perform and the S&P 500 rises more than 10 % in 2026, according to Wolfteam Ltd.'s projections and estimates. 

Private Equity And The Relatively High Interest Rates Levels In The USA

 

Many analysts claim the relative under performance of the stocks of the largest private equity firms in the world Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. is due to the high levels of interest rates currently in the USA.

The Federal Funds Rate, the leading rate set by the Federal Reserve was lowered to 3.75 % on the 10th of December 2025.

Wall Street equity research analysts claim the high interest rates needed to finance the circa 70 % of debt financed leveraged buyouts puts downward pressure on the value and valuations the leading private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are prepared to pay for leveraged buyout acquisitions. That is intrinsically true, of course.

But the huge wave of money available in the global financial system going after currently mainly artificial intelligence, AI technology company investments applies upward pressure on value and valuations. This could create a virtuous deal cycle that could recycle private equity firms 2021 and earlier investments and provide new cash flows for new investments, according to Wolfteam Ltd.'s projections and estimates.

The valuations of the S&P 500 are historically high, but this does not mean they could not go higher.

If the AI boom turns into bust, however, which could affect the whole US stock market, private equity companies could loose large part of their value.

Blue Owl And AI

 

Blue Owl Capital Inc, Blue Owl the globally leading private credit asset management firm recently announced it is planning  together with Meta to build a 27 billion USDs AI data center project in Louisiana.

Blue Owl manages 152.1 billion USDs in private credit assets, so the Louisiana data center build out along with Meta, Facebook's owner is a huge bet by Blue Owl on artificial intelligence, AI and its potential to make humanity more productive and able to rest better.

Large part of Blue Owl's assets under management are already invested in AI projects.

Blue Owl, along with the other private equity, private credit and real estate asset managers has underperformed grossly the S&P 500 in 2025. One explanation is that private equity, private credit and real estate assets of the leading firms Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, etc. are basically leveraged investments in large part in artificial intelligence, AI. The magnificent 7 AI companies Apple, Microsoft, Amazon, Alphabet, Meta, Tesla and NVIDIA and the broader AI sector did not perform very well in 2025. With notable exceptions like the chip stocks Broadcom, Micron, NVIDIA etc.

So private credit being in large part a leveraged investment on AI did not perform well in 2025, hence Blue Owl's  stock lackluster performance in 2025.

If AI lives up to the current hype, though Blue Owl's market capitalization could rise fourfold from current levels, according to Wolfteam Ltd.'s projections and estimates. 

If the AI's boom, turns into bust, however, Blue Owl market capitalization could fall further from current levels. 

2026 For Private Equity

 

2026 could be the year that finally speeds up private equity deal making to similar boom levels as during 2021.

The Federal Reserve could lower the Federal Funds Rate two times in 2026, while a spade of coming IPOs, according to various media sources of mega capitalization companies like OpenAI, Anthropic, SpaceX and other large, medium and small companies from technology and other sectors joining and completing IPOs could unlock capital for private equity companies.

The possible large, high publicity IPOs could invoke other companies to do and IPO. IPOs are traditionally a liquidity event for the private equity asset managers.

The IPOs could be a precursor to active deal making, private equity asset managers selling portfolio companies and returning money to their Limited Partners institutional investors pension funds, endowments and insurance companies, thus realizing carry for themselves.

Which could turn 2026 in a very prosperous year for Blackstone, KKR, Apollo, Caryle, Ares, CVC etc. large, medium and small private equity asset managers, according to Wolfteam Ltd.'s projections and estimates.

All this is barring a large, negative geopolitical, economic or of natural consequences event, the happening of which could derail the possible coming IPOs and a wave of deal making.

Will 2026 Be The Year Of The AI Technology IPO?

 

Several large AI startups like Anthropic and OpenAI are preparing to do an Initial Public Offering, IPO in 2026, according to various media outlets. SpaceX is also reported to plan an IPO in 2026.

OpenAI has last raised money at 500 billion USDs and is reported trying to raise 100 billion USDs at 830 billion USDs valuation,currently, all while remaining private.  

Anthropic last raised 13 billion USDs at 183 billion USDs post money private market valuation. 

SpaceX is staging a second market share sale currently that could value SpaceX at 800 billion USD.

SpaceX, OpenAI and Anthropic could be huge IPOs if done in 2026. SpaceX and Open AI, especially could take the top 2 spots in the world historically for money raised from IPOs, ever.

Possible SpaceX, OpenAI and Anthropic could open the IPO floodgates and many more AI technology companies could go public, along with companies from other hot sectors like energy and other sectors.

This could result in hundreds of billions of USDs raised via IPOs. Hundreds of billions of IPOs raised via IPOs in the US, however, could strain the market and be precursor to a selloff and even and AI boom correction, according to Wolfteam Ltd.'s projections.

But barring an unforeseen deeply negative event, 2026 will be one of the best, highest volume IPOs years on record, according to Wolfteam Ltd.'s projections and estimates.

 

What To Expect Of The AI And Private Credit Boom In 2026?

 

Artificial intelligence, AI and private credit investing are the parts of the global economy that attracted the most capital in the last 5 years.

The investments in artificial intelligence, AI will most probably continue in frantic pace in 2026. Only Amazon, Microsoft, Alphabet and Meta plan to invest around 200 billion USDs in 2026 in AI data centers related investments. AI can, according to the forecasts of Wall Street investors and analysts and Silicon Valley investors and technologists and many company CEOs change profoundly how we work and enjoy leisure.

AI will need many more years to fully come to fruition, so in 2026 the AI investment boom will most likely continue, according Wolfteam Ltd.'s projections and estimates.

Private credit is another boom area of the global economy. Private credit funds have replaced banks in high yield lending at 7 % to 15 % rates to risky borrowers. Private credit funds have raised tens of billions of USDs in new assets in the last 5 year, which they plow in private credit. Large part of the private credit lending flows to small and medium technology enterprises further feeding the AI boom.

Since there is high demand for private credit type lending and the returns on private credit are often in double digits per year, the private credit boom will most likely continue in 2026, but a markedly slower pace, according to Wolfteam Ltd.'s projections and estimates.

  

 

Banks And Private Equity Investments

 

Banks are financing and investing in ever more private equity, private credit type investments since the beginning of 2025, according to regulatory filings and news articles.

Regulators have been loosening up bank regulations.

And the largest US banks like JPMorgan, Bank of America, Citigroup, Wells Fargo started writing cheques for billions, in some cases for tens of billions of USDs to finance leveraged buyouts and multi billion USD deals.

The leading banks with large investment banking operations Goldman Sachs and Morgan Stanley are putting up their own capital and capital from the assets they manage on behalf of clients and newly raised by them funds into private equity type deals more and more.

All this loads the financial, banking system with leverage, since private equity investments are in essence leveraged investments and so is in fact private credit high interest loans, which  JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley are giving out more and more.

The financial system is becoming riskier and more leveraged, according to Wolfteam Ltd.s projections and estimates. But for now regulators and the banking system itself seems to have things under control. 

What If AI Turns Out To Be A Bubble? The Effect On Private Equity Companies

 

According to many Wall Street investors, research analysts and Silicon Valley investors and technologists  artificial intelligence, AI is the fourth industrial revolution and artificial intelligence, AI will change profoundly how humanity works, consumes leisure and communicates.

In short, artificial intelligence, AI could makes us tremendously more productive, according to those forecasts.

However, if the current artificial intelligence, AI turns out to be a bubble, possibly the greatest financial bubble in history the hyperscalers Amazon, Microsoft, Alphabet and Meta will be disproportionately hurt. With them, however the market capitalization and value of small and medium sized artificial intelligence, AI technology companies will suffer. And not only AI companies, but almost all technology companies will loose value if artificial intelligence, AI turns out to be a bubble and bursts. More than 40 % of new technology investments go into artificial intelligence, AI companies. And since most other companies try to instill artificial intelligence, AI in their organizations, if AI bursts the technology sector and a large part of the global economy will be hurt.

Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. and the other leading private equity, private credit, real estate and infrastructure asset management companies, along with small and mid-sized private equity managers have invested large part, in some cases more than 30 % of their newly raised assets under management in the artificial intelligence, AI boom, which means they have invested in artificial intelligence, AI companies, artificial intelligence, AI data centers, energy and infrastructure companies that provide the energy for the artificial intelligence, AI data centers. In short private equity, private credit, real estate asset management firms have financed to a large part the artificial intelligence, AI boom with hundreds of billions of USDs in artificial intelligence, AI related investments.

And if the current AI boom turns out to be a bubble, after artificial intelligence, AI technology companies and the energy companies supplying the artificial intelligence, AI data centers with energy, the next in line to loose hundreds of billions of USDs in value and market capitalization will be the private equity, private credit, real estate and infrastructure asset managers like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. 

Private equity firms, if artificial intelligence, AI turns out to be a bubble that wipes out trillions of USDs of value will suffer magnified losses since they are triple leveraged on the artificial intelligence, AI boom. Namely, private equity firms via private equity leveraged buyouts of artificial intelligence, AI technology companies take only the equity portion which is around 30 %, while borrowing the rest of the private equity buyout in debt and thus private equity firms leverage themselves several times. Via private credit lending to artificial intelligence, AI technology firms at interest rates of 7 % to 15 % usually, private credit asset managers take out additional leveraged, because their high interest loans are usually the first to be wiped out of the capital structure. In addition, private credit firms invest in securitization via buying Collateralized Loan Obligations, CLOs Collateralized Debt Obligations, CDOs. Private credit companies usually own the most junior tranches of Collateralized Loan Obligations, CLOs Collateralized Debt Obligations, CDOs, so they stand in line to be the first to loose possibly tens of billions of USDs of value. In addition, artificial intelligence, AI is  operationally leveraged. So all private equity, private credit, real estate asset management firms that have invested in artificial intelligence, AI are essentially triple leveraged. Triple leverage magnifies gains, but it also tends to cause multiple fold increase of losses.

If the artificial intelligence, AI boom turns out into a bust, technology companies will loose trillions of USDs of value, while private equity firms will loose hundreds of billions of USDs of value on their investments, according to Wolfteam Ltd.'s projections and estimates.

 

Carlyle And AI

 

Carlyle Group Inc or Carlyle, the world's fourth largest listed private equity, private credit, real estate asset management company in terms of market capitalization and the third largest in terms of managed assets alternative asset manager has invested heavily in artificial intelligence, AI by using its newly raised fund from the last 7 years, especially via its private credit business.

Carlyle, the fourth largest private credit asset manager in the world in terms of assets is using large part of its multi billion USDs raised for private credit to give out loans at 7 % to 15 % interest rates to artificial intelligence, AI technology companies. Artificial intelligence, AI companies, operating in a still fledgling and yet to prove sustainable business are often with sub investment grade rating and are considered risky, high yield or even "junk" bond rated issuers. That is why the loans to the small and mid-sized artificial intelligence, AI technology firms often come with interest rates of 7 % to 15 %.

Big money center banks like JPMorgan, Bank of America, Citigroup and Wells Fargo and even investment banking revenue high banks like Goldman Sachs and Morgan Stanley eschew such sub investment grade borrowers like small and mid-sized artificial intelligence, AI technology companies, because they are considered too risky and thus non bankable. 

Here come companies like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. which finance such  small and mid-sized artificial intelligence, AI technology companies via giving them loans out of their private credit assets under management with interest rates of 7 % to 15 %.

The artificial intelligence, AI hyperscalers Microsoft, Amazon, Alphabet and Meta are different, of course, because they are rated investment grade. The AI hyperscalers Microsoft, Amazon, Alphabet and Meta are hugely profitable each of them making more than 34 billion USDs in profit in 2024. So the AI hyperscalers Microsoft, Amazon, Alphabet and Meta can finance the build out of AI technology data centers themselves via their profits. In 2026 it is forecast that AI hyperscalers Microsoft, Amazon, Alphabet and Meta alone would invest more than 200 billion USDs in AI data centers.

For the small and mid-sized artificial intelligence, AI technology companies companies like Carlyle via their private credit high interest loans are indispensable since many small and mid-sized artificial intelligence, AI technology companies are loss making or cannot afford the multi billions of USDs AI data centers need alone.

So as long as the AI boom keeps going, Carlyle will keep lending out private credit 7 % to 15 % loans to small and mid-sized artificial intelligence, AI technology companies and if AI ends up changing profoundly our world by improving, making more efficient how we work, rest and communicate, Carlyle's market capitalization could rise to 127 billion USDs from its Carlyle's current 21.98 billion market capitalization. , according to Wolfteam Ltd.'s projections and estimates.

On the contrary, if AI turns out to be the greatest bubble in history, Carlyle, due to its leveraged investments in artificial intelligence, AI technology companies, could be disproportionately hurt. 

Ares And AI

 

Ares Management Corp or Ares, the leading private credit, real estate and private equity asset management company has a large exposure to artificial intelligence, AI via mainly its private credit business unit.

Which means Ares Management gives out loans with interest rates between 7 % and 15 % and sometimes even higher interest rates to artificial intelligence, AI technology companies. In the same time Ares uses its real estate assets under management to help build out AI data centers. Add to that that Ares does private equity leveraged buyouts of artificial intelligence, AI technology companies.

Private credit is a hot area in the last 7 years. Small and medium-sized loans have usually below investment grade credit ratings and lending to them would require charging interest rates between 7 % and 15 %. Money center banks and regional banks avoid making such risky loans. So enter large private credit asset managers like Carlyle, Apollo, Blackstone, KKR, Ares etc. which have raised private credit funds exactly to lend out at interest rates at 7 % to 15 %. So Ares and the other mentioned leading private credit asset managers finance the initiatives and projects of artificial intelligence, AI technology companies at 7 % to 15 % interest rate levels.

Artificial intelligence, AI is  operationally leveraged by nature and making basically leveraged loans, which giving out credit at 7 % to 15 % could be called, makes for double leverage and creates layers of risk in the private credit portfolio of Ares.

If the AI boom continues Ares stands to make returns of several fold on their investments and if the artificial intelligence, AI boom turns to bust both the private credit loans and the equity portion of Ares' artificial intelligence, AI private equity leveraged buyouts investments could be wiped out, according to Wolfteam Ltd.'s projections and estimates.

 

When Will The AI Boom Resemble A Bubble?

 

If the hyperscalers technology companies Microsoft, Amazon, Alphabet and Meta start making yearly reported net losses, then the current AI investment boom could resemble many signs of a bubble, according to Wolfteam Ltd.'s projections and estimates.

Another sign could be if the Price/Earnings ratios of  Microsoft, Amazon, Alphabet and Meta and other leading AI companies rise above 55.

A telling sign of first the Dot Com boom, then subsequent bust was that the leading companies in the Dot Com era were unprofitable. 

Nowadays, many Wall Street investors and research analysts and Silicon Valley investors and technologists point to that fact and also tout that now Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies are very profitable.

That said, Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies are investing huge amounts of capital, more than 350 billion USD in 2026 expected. And if these investments don't pay off Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies could start incurring huge losses. Which could burst the possible AI bubble, according to Wolfteam Ltd.'s projections and estimates.