US lenders face risks as AI credit demand surges among lower-rated firms

AI-related borrowing has increased substantially among lower-rated US firms this year, drawing investor scrutiny of underlying financial assumptions. Lenders are demanding higher returns and greater compensation for the risks associated with AI investments.

While demand exists for predictable revenue streams, appetite for lower-quality AI credit remains limited. Borrowing costs have risen sharply as companies move down the credit spectrum, tightening financing availability for riskier borrowers.