Private equity firms are trying to include the concept of "artificial intelligence failure" in loan agreements as a force majeure clause similar to hurricanes and epidemics. Such a clause would allow their companies to postpone indefinitely the cancellation of late payments and other defaults under the pretext of the negative impact of artificial intelligence on the business. Lenders and asset managers are already scrutinizing existing documentation in droves because of concerns that they have mistakenly signed up for this open loophole.

Private equity firms are trying to include the concept of "artificial intelligence failure" in loan agreements as a force majeure clause similar to hurricanes and epidemics. Such a clause would allow their companies to postpone indefinitely the cancellation of late payments and other defaults under the pretext of the negative impact of artificial intelligence on the business. Lenders and asset managers are already scrutinizing existing documentation in droves because of concerns that they have mistakenly signed up for this open loophole.