Ed Ludlow

Just really quick, because I think we want to get to what's happening in credit as well.

But chips have massively outperformed year to date.

The Sox is up more than 20 percent.

The rest of the industry is down single digits.

Why?

Markets are increasingly looking at this AI wave as a bit zero sum and where caution has been concentrated in the hyperscalers because of return on investment and rising costs, where we just continue to see constructive evidence is around the need for AI infrastructure.

This is going to be the year that inference demand outpaces demand from training.

And it's a pivot, but one that is expected to continue to compound.

All of that points to a continued need for chips.

And it's not just your GPUs, but also memory, CPUs, and a much broader custom silicon, a much broader array of those chips that are needed for AI.

Zero-sum is interesting because, of course, Southwest continues to sell off and we're seeing anxiety around Carlisle's private credit fund today and Redemptions being there.

But elsewhere in credit and elsewhere in loans, for example, that fuel M&A, we're actually looking like we're getting towards an endgame when it comes to Paramount and they're being able to syndicate out some of that debt efficiently.

How are you thinking about the bond markets remaining open in this moment?

We still think there's a lot of appetite from bond markets to finance this AI boom.

I mean, this is such a different business model than what you typically see in credit.

It's one that is potentially recipient to significant demand, and one where the fundamentals so far still look quite solid.

When I think about the worries around private credit more broadly, obviously they've catered significantly towards software.

And there is just this inherent unknown of what the future of software is going to look like around AI.

But we think that a lot of that caution is already reflected in valuations for these publicly traded BDCs.

And instead, we do see room for software to reinvent itself, too.