Artificial Intelligence (AI) may dramatically change the market dynamic of a wide range of industries.

Recent advances in large language models and generative AI risks damaging the credit of businesses from online commerce all the way to industrials. This offers potentially tremendous benefits for the economy and society as a whole – but adds potentially significant credit uncertainty for investors now.

The EU is currently working on AI regulation – proposals for which include requiring AI companies to disclose any copyrighted material used to train their models – which could in turn expose them to litigation.

Regulation of this form provides for a potentially slowing force on the rate of change of creditworthiness of issuers.