00:00If some of that does come true where you see issues around software, for example,
00:03what are the consequences look like for the industry?
00:08Well, you know, what's going to happen in software is going to be a very mixed bag.
00:12There will be many software companies that do extremely well with applying AI tools.
00:17And you could say even the majority will do quite well.
00:21The problem is that in lending, the majority isn't good enough.
00:24You know, you need the vast majority to do fine because all of your upside is getting the yield on
00:31your loan.
00:32And if any of them go bad, of course, then you start to lose money.
00:35And that's probably what we're going to see is that over time, there are going to be winners, great winners,
00:40and there are going to be losers.
00:41And those losers, unfortunately, will have very low recovery values because they're simply going to be eaten away by AI.
00:48It's probably too early to say exactly which ones those are going to be and how big it's going to
00:52be.
00:52But in an industry that has 20, 30, sometimes even more percent of their loans in software,
00:59you have to imagine that, you know, some significant part of that is going to get into trouble
01:03and there will be losses in that space.
01:06How long it takes and just how bad it is is going to be seen.
01:09And unfortunately, you know, you've got a lot of investors who would rather not wait around to see how bad
01:14it gets.
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