Elevated AI-driven credit risks are concentrated in three technology, media and telecommunications (TMT) sectors, with software, media and services facing rising disruption risk while overinvestment risk remains largely confined to hyperscalers and select cloud providers, according to a new Fitch Ratings report.

Asset-light businesses where value is driven by intangibles such as software, IP, brands and human capital face higher disruption risk as "good enough" AI-enabled substitutes emerge. These sectors could see intensified competition and pressure on pricing and margins as AI lowers barriers to entry and reduces development costs. Within these sectors, companies with mission-critical functions, high switching costs, integration into regulatory frameworks, and proprietary data are likely to be more resilient. Financial flexibility to invest in AI capabilities, absorb transition costs, and pursue strategic acquisitions will also be critical to protecting competitive moats.

Outside the TMT sector, over investment risk appears contained. Aggregate capex intensity for Fitch-rated North American corporates (excluding the four largest hyperscalers) will rise only modestly to 7.4% of revenues in 2025-2026, compared to 6.0%-7.0% over the past five years, while FCF margins remain healthy. Most corporates continue to approach AI-related capital investments with prudence, focusing on meeting visible demand and preserving balance sheet flexibility.

For most sectors in Fitch's 14-sector review, AI is not a near-term rating driver. Adoption will be gradual and efficiency-focused, with credit outcomes still dominated by traditional considerations such as business conditions, financial structure and financial flexibility.