Goldman Sachs has approached hedge funds with strategies to short corporate loans as investors seek ways to bet against enterprise software companies threatened by AI advancements. The Wall Street bank has offered complex trades using total return swaps that would allow investors to profit from declines in loans to software companies, according to sources familiar with the matter.

These strategies target companies owned by private equity groups that spent hundreds of billions of dollars between 2020 and 2024 acquiring enterprise software makers now facing existential threats from AI. Goldman has received multiple requests for these swaps in recent weeks and has begun informally contacting hedge funds interested in betting against technology company loans. The moves come as new AI models proliferate and investors look for ways to wager on trouble in the software industry.

While some funds have used swaps to short loans in the past, many have struggled to find counterparties willing to take the risk. Goldman emphasized it engages constantly with clients on trading strategies across asset classes. The bank has not widely marketed the approach, instead offering services to specific clients. This cautious rollout reflects the sensitivity of helping funds bet against corporate loans when other bank divisions compete to underwrite these loans for major clients like private equity groups.