"JPMorgan is restricting some lending to private credit funds after marking down the value of certain loans... to software companies." Software companies are facing intense scrutiny over their vulnerability to AI disruption. As private credit lenders mark down these assets and restrict funding, the negative sentiment and tighter liquidity will likely spill over into public software valuations. SHORT. The broader software sector is facing a dual threat of AI obsolescence for legacy products and a tightening funding environment. Software companies that successfully integrate AI into their products could see a re-rating higher, offsetting the negative macro sentiment.