Why 'Big Short' Legend Steve Eisman Says AI Will Trigger The Next Credit Crisis In Software - Oracle (NYS
Benzinga
Last updated: April 28, 2026
Investor Steve Eisman, known for his successful shorting of subprime mortgages before the 2008 crisis, identifies a new brewing credit cycle. This cycle is reportedly originating within private equity's software loan book, with generative artificial intelligence identified as the primary catalyst.
- Key Observations: Eisman suggests that private equity firms have been aggressively lending to software companies, creating a potentially unstable market.
- The proliferation of generative AI is anticipated to disrupt the valuations and profitability of many existing software businesses.
- This disruption could lead to significant defaults and losses within the private equity software loan portfolio.
- The scale of these potential losses may be substantial enough to trigger a broader credit cycle downturn.
- Eisman's past prescience in identifying systemic financial risks lends weight to his current warnings.
- The analysis points to a specific sector within private equity as the nexus of the next financial vulnerability.
- The interconnectedness of technology, finance, and credit markets is highlighted by this prediction.
- The potential impact extends beyond private equity to the broader financial system.
