Artificial intelligence is reshaping the leveraged finance market.

9fin’s deputy LevFin editor, Sasha Padbidri hosted a fireside chat with Karen Buzard, who leads the Markets Innovation Group at A&O Shearman, to unpack recent developments.

Didn't attend the session? Watch the full recording here.

Here’s our top takeaways from the webinar:

1. AI risk language is starting to show up in deal documentation

Lawyers are looking at ways to incorporate AI-specific risk disclosures into deal OMs. These include AI model reliability, data biases, litigation exposure, regulatory uncertainty and cybersecurity concerns.

While there aren’t any public deal documents with AI-specific covenant language to-date, the trend toward enhanced due diligence frameworks around AI deployment suggests that this is something market participants should watch out for in the coming months.

Wondering if AI-enhanced IP products would be considered a viable form of debt collateral? Read our reporting here.

2. Humans remain irreplaceable, but skill sets are shifting

AI adoption isn't eliminating roles (yet!) but it is transforming them. While AI can now handle most administrative tasks and initial document drafting, complex debt transactions still require human insight for structuring, negotiation and risk analysis.

That’s why we built 9fin AI, a tool that uses generative AI to help our customers streamline manual research. 9fin AI pulls from thousands of earnings calls transcripts, proprietary 9fin data, SEC filings, including 10Qs and 10Ks to answer complex questions in real-time.

3. US regulatory framework will remain fragmented

Unlike the EU's comprehensive AI Act, US regulation around AI will likely continue developing as a mix of state-level rules with guidance from some federal agencies.

This approach creates compliance complexity for market participants operating across multiple jurisdictions, with legal teams having to navigate overlapping frameworks rather than relying on unified federal standards.

Why this matters now

The leveraged finance industry faces a critical juncture where early AI adopters are gaining significant operational advantages while regulatory frameworks struggle to keep pace. As AI tools become standard infrastructure rather than experimental technology, the competitive gap between adopters and laggards will only widen.

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