The surge in loan defaults in the U.S. software industry is leading to a "software-PE" death spiral

Data compiled by Bloomberg shows that over the past four weeks, loans to technology companies exceeding $17.7 billion have fallen to non-performing levels, with the total amount of non-performing debt in the U.S. technology sector soaring to approximately $46.9 billion, the highest level since October 2022. This crisis is spreading to private credit, which is currently experiencing two shocks: the collapse of the loan logic for software companies and the waning attractiveness of private credit. As software equity valuations plummet, private credit may tighten lending conditions, creating a "software-PE" death spiral