According to some analysts and investors around 30 % of the capital raised in the last 7 years by the leading large and mid cap private equity, private credit, real estate and infrastructure asset managers has gone into artificial intelligence, AI, technology and altogether software companies.
AI and software related investments make up around 20 % of the total portfolio of the Blackstone, KKR, BlackRock, TPG, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group etc. leading private equity and private credit asset managers, according to research analysts, investors and media.
The world is experiencing an oil shock as the price of oil went up more than 60 % from three weeks ago.
The current shock oil price rise will most likely cause a global economy inflation shock. The rising prices will most likely force the Federal Reserve to withhold from raising the Federal Funds Rate in 2026. The probabilities of the Federal Reserve raising rates in 2026 fell by a lot after the Federal Reserve meeting last Wednesday.
Such a development would put a downward pressure on the valuations of AI, technology and software companies in the leading private equity, private credit firms portfolios.
And the fall in portfolio values of the leading private equity firms will be even more exacerbated if the probable inflation shock caused the Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and other leading central banks to start hiking rates in the near future.
The probable negative effect of rising interest rates should be temporary and not catastrophic due to artificial intelligence, AI's innovation potential and the huge positive cash flows generated not only by the hyperscalers Amazon, Microsoft, Alphabet and Meta, but also by many mid cap and smaller AI firms.
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