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The lucrative AI debt market – disrupting traditional debt lending: Part 1

2 March 2025 / Author(s): Isabel Neelands , Trisha Shah
Issue: March 2025 / Categories: Feature

In two parts, the second to be published in the next issue, we discuss the burgeoning debt market in artificial intelligence (AI) and how this could disrupt traditional debt lending frameworks if such frameworks are not adapted to AI companies. This Part 1 discusses how the unique nature of AI companies could present distinct challenges to financial covenants in traditional lending frameworks if not properly considered in the context of such companies. Part 2 will then discuss how the unique nature of AI-related assets could present similar challenges to the process of security enforcement in traditional lending frameworks if not properly considered in the context of such assets.

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