JPMorgan Chase & Co. has warned that artificial intelligence could disrupt $40 billion to $150 billion in leveraged loans packaged into US collateralized loan obligations. The bank's analysis suggests the AI boom may fundamentally alter the risk profile of these structured finance products, potentially triggering significant market shifts.

CLOs have been a cornerstone of corporate lending, bundling high-yield loans into tradable securities. However, AI's rapid advancement could render certain business models obsolete, particularly those in sectors vulnerable to automation. This technological disruption might lead to higher default rates among underlying loans, affecting the entire CLO ecosystem.

The warning highlights growing concerns about AI's broader economic impact. As companies race to adopt AI technologies, traditional lending structures may struggle to adapt. JPMorgan's assessment serves as a wake-up call for investors and regulators to reassess risk models in an era of accelerating technological change.