Blackstone's Stephen Schwarzman says the private-credit panic over software is 'way overdone'
What did he say? Blackstone co-founder and CEO Stephen Schwarzman says the panic over software borrowers in private credit will look "way overdone" within a year or two. In an interview on Bloomberg's Leaders with Francine Lacqua, released on 25 October 2026, he said there is nothing dangerous in private credit: "These funds are still generating roughly 9% returns, and defaults have gone up a little bit."
The software panic "There was a small hedge fund that published a report that panicked the market and said that basically every software company's going to go bankrupt in the next two years," Schwarzman said. He did not name the firm. The post that spread the clip identified it as Citrini Research, whose scenario essay "The 2028 Global Intelligence Crisis" hit stocks in February, according to Business Insider. Schwarzman said he had been with "the head of one of the three big AI companies", who called the idea of the software industry going bankrupt in two to three years "absolutely absurd": "We sell AI and tokens to these companies. They're going to be improving their businesses, and there'll be a certain percentage of software companies that are mispositioned for this new world." His conclusion: "Once you panic people, it's tough to calm them down."
The other side The worry has not gone away. Investors have been trying to pull money from funds with large software exposure, because AI makes it harder to tell which software businesses will fall behind, and private loans rarely trade, so their values are harder to see. Blackstone and other managers have limited withdrawals from some private credit funds, Bloomberg noted in the episode. Schwarzman himself acknowledged that defaults have risen.
Context Schwarzman also said Blackstone's roughly $10 billion purchase of a data-centre business in 2021 has grown about 15 times, making it the world's largest data-centre owner. That figure is his own.
Sources: Bloomberg Originals: Leaders with Francine Lacqua (YouTube) · Clip on X · Business Insider
