Episode summary
AI threats setting up insurance industry for big opportunities, says Tacora Capital CEO Keri Findley
CNBC Fast Money
· · 6 min · Hosts: Seema Mody · Guests: Keri Findley
Summary
Keri Findley says the credit markets are still absorbing high-profile issuance, even as banks have pulled back because higher rates make financing tougher. In her view, money managers still have enough cash to support deals like Meta’s, but the broader environment is more selective and more sensitive to funding costs tied to SOFR.
A big theme is how AI could create new kinds of insurable risk. Findley argues that while “robots killing people” is too extreme for a practical product today, insurers could potentially cover losses tied to businesses uploading data into LLMs and then seeing that data misused or stolen. She says a new insuretech backed by venture capital could underwrite that kind of exposure, and Tacora would be interested if the underwriting box made sense.
Findley also thinks the regulatory backdrop matters for private credit. She says the last few years have been a good time to be a lender or originator, but that could change in about two years if enforcement becomes stricter. On AI infrastructure lending, she says Tacora is avoiding GPU financing because rapid hardware obsolescence makes depreciation risk hard to model.
Key takeaways
- Findley says demand still exists for new debt deals, with money managers able to fill offerings like Meta’s despite bank retrenchment.
- She says AI-related insurance could emerge around data uploaded into LLMs and the risk of theft or misuse.
- Findley says Tacora is staying away from GPU financing because usable life may be only 18 months, making depreciation risk too hard to price.
- She expects the regulatory climate could tighten in roughly two years, which could hurt lenders and originators.
- She says Tacora still sees strong demand for its $10 million to $50 million loan niche even as the broader market softens.
Notable quotes
“THERE'S STILL ENOUGH MONEY AT MONEY MANAGERS TO FILL OUT BOND OFFERINGS LIKE META”
“YOU COULD CREATE AN INSURANCE PRODUCT FOR THAT, LIKE INSURANCE, THAT IF YOU UPLOAD YOUR DATA, YOUR BUSINESS INTO ONE OF THE LLMS”
“THE LIABILITY COULD ONLY BE THE REVENUE OF THE BUSINESS. AND IF YOU HAD ENOUGH OF THEM AND A LOT OF DIVERSITY, IT COULD MAKE A LOT OF SENSE”
“THERE'S A WORLD WHERE THAT COULD STOP, AND THERE'S A WORLD WHERE, YOU KNOW, KIND OF LITTLE THINGS”
“NOBODY KNOWS HOW LONG A GPU IS GOING TO BE USABLE”
How the episode opens
Report, when ceo mark zuckerberg talked about creating optionality to fund the company's infrastructure investments. Melissa.
Julia. Thanks, julia. Boorstin.
Let's get more on the credit markets and the ai trade. Kerry findley is ceo and chief investment officer at takura capital management. She's a former partner at hedge fund Third Point building and running the firm structured credit business.
Kerry, great to see you again. Thank you for having me. So we're getting news of META raising funds.
Everybody's raising funds these days. Is there demand in the markets for all of these issuances in your view? I mean so far, so good.
Banks have obviously pulled back with rates being as high as they are. They obviously finance off of off of sofr. So it's been tough.
But to date, you know, the savings rate was still decent. And so there's still enough money at money managers to fill out bond offerings like META.
Wow. Okay.
We brought you on because of this interesting sort of notion about insurance in the ai industry, because we have so many warnings from frontier models in particular saying that, you know, you know, it could cause devastation to humanity. So how do you protect against that? You're saying that there could be an insurance industry product for it?
I mean, that one's obviously a little much, a little much of like, how do you create an insurance product for robots, robots killing people? But, you know, we've heard stories about people loading their business into Anthropic and all of a sudden they're hearing that that data is being used to serve as other businesses as well as service Anthropic potentially competing with them. I mean, it's just an idea, but that's something we heard about.
And so you could create an insurance product for that, like insurance, that if you upload your data, your business into one of the llms, that all of a sudden if it is stolen, which we think is still unlikely and very unlikely to actually work, that you could create an insurance product to protect against it.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai threats
- insurance for ai data risk
- private credit financing
- interest rates and sofr
- meta fundraising
Companies and tickers mentioned
- META
- Meta
- Anthropic
- Tacora Capital Management
- Third Point
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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