Artificial intelligence is transforming the global economy at breakneck speed. But the same technological disruption that is driving excitement across markets is also creating new uncertainty for investors.

As companies race to invest billions in AI infrastructure, markets have experienced sharp swings fueled by geopolitical tensions, rising energy prices, and concerns that automation could disrupt entire industries.

Some portfolio managers believe investors seeking stability during this transition may want to look beyond traditional stocks and bonds.

One corner of the fixed-income market that is gaining attention is securitized credit, particularly asset-backed securities and commercial mortgage-backed securities. According to several investment strategists, these securities could provide a cushion against volatility triggered by AI-driven economic change.

Why Investors Are Looking Beyond Traditional Bonds

Artificial intelligence has quickly become one of the dominant forces shaping global financial markets. The explosion of AI spending by large technology companies has triggered a surge in corporate debt issuance as firms borrow billions to build data centers, purchase advanced chips, and expand computing infrastructure.

At the same time, investors are wrestling with a difficult question.

Which industries will thrive in the age of AI and which ones could be disrupted?

This uncertainty has created a growing appetite for assets that are tied to real-world economic activity rather than purely digital business models.

Nicholas Travaglino, head of securitized credit at Nuveen, believes these types of investments may offer a degree of insulation from AI disruption.

“The equity side of the market has been focused on businesses with moats and heavy asset type businesses,” Travaglino said. “Securitized fits that narrative very well. People still need a place to live. There is still going to be a need for commercial property. … You’re still going to have need for automobiles. You’re still going to have need for consumer credit.”

In other words, many securitized investments are backed by everyday economic necessities. These include loans tied to housing, vehicles, credit cards, and commercial properties.

Even as artificial intelligence reshapes industries, the underlying demand for these assets remains relatively stable.

Understanding Securitized Products

Securitized products are financial instruments created by pooling together income-generating assets and then selling securities backed by those assets.

Two of the most common categories include:

Asset-Backed Securities (ABS)
These securities are backed by pools of consumer or infrastructure-related loans. Examples include auto loans, credit card receivables, equipment leases, and even financing tied to telecommunications infrastructure such as cell towers.

Commercial Mortgage-Backed Securities (CMBS)
These securities are backed by loans on commercial properties including office buildings, retail centers, apartment complexes, hotels, industrial warehouses, and increasingly data centers.

Because these securities generate income from underlying loans, they often offer investors higher yields than comparable corporate bonds while also providing diversification benefits.

One investment vehicle focused on this space is the Nuveen Securitized Income ETF (NSCI), which invests across multiple securitized sectors including mortgage-backed securities, asset-backed securities, and collateralized loan obligations.

The fund has attracted attention among income investors seeking exposure to this niche corner of the bond market.

Why the AI Boom Could Favor Securitized Credit

One surprising twist in the AI boom is that securitized credit may not only benefit from stability but could also participate in the growth of artificial intelligence itself.

According to Travaglino, new securitized deals tied to data center infrastructure are beginning to emerge.

These investments are backed by facilities that are already built and operational.

“They’re generating compute and they have contracts with consumers of that compute. That is generating cash flow. That’s a known quantity, and those payments are able to pay the bonds in [the] ABS space,” Travaglino said. “That’s a really attractive risk for a growing sector.”

In other words, rather than betting on speculative AI startups, investors can gain exposure to the infrastructure powering the AI revolution.

Data centers require enormous capital investment and long-term contracts with large technology firms. Those predictable cash flows can be packaged into securities that produce steady income for investors.

Less Supply Than the Corporate Bond Market

Another factor making securitized credit attractive is supply dynamics.

Large technology companies known as hyperscalers are issuing massive amounts of corporate bonds to finance AI expansion.

Bank of America analysts estimate that hyperscaler companies could issue around $285 billion in corporate bonds this year to support AI-related investments.

By contrast, securitized issuance tied to data center infrastructure is expected to be far smaller.

John Kerschner, global head of securitized products at Janus Henderson Investors, believes that relative scarcity could support prices in the sector.

“Most people are calling for about $50 billion of data center issuance in ABS and CMBS, much, much less than the corporate credit market,” Kerschner said. “In general, we’re still looking at the AI transition and thinking that securitized products are probably a good place to hide out.”

Lower supply combined with steady demand can create a favorable environment for investors seeking yield.

Commercial Real Estate Opportunities Remain

Commercial mortgage-backed securities have faced significant challenges in recent years, particularly following the pandemic.

Remote work reduced demand for office space, and rising interest rates made financing more expensive.

However, some investors believe the sector now contains selective opportunities.

Travaglino argues that certain commercial sectors remain resilient because they rely on physical infrastructure that cannot easily be replaced by digital technology.

“[The sector] has a good moat around it in terms of creating physical goods and machines and refining chemicals and doing things that we need that can’t be replicated by zeros and ones,” he said. “That’s important, it has staying power.”

Industrial real estate, logistics facilities, and manufacturing spaces have benefited from global supply chain changes and continued demand for physical goods.

Multifamily housing also remains in demand as population growth and limited housing supply continue to support rental markets in many cities.

What About Office Real Estate?

Office real estate has been one of the most controversial areas of commercial property.

First, the pandemic accelerated remote work trends.

Then new fears emerged that artificial intelligence could eliminate large numbers of white-collar jobs, potentially reducing office demand even further.

Earlier this year, commercial real estate broker stocks and real estate investment trusts declined after some investors raised concerns that AI could disrupt professional services and corporate employment.

But not everyone agrees with that outlook.

Kerschner believes the transformation will likely happen slowly rather than overnight.

“I don’t buy that,” Kerschner said of the AI job fears. “If there is a trend, it’s very slow moving. And quite frankly, just the opposite is true right now.”

He pointed to strong demand for top-tier office buildings in New York, particularly premium properties that offer modern amenities and prime locations.

High-quality buildings may continue to attract tenants even as older properties struggle.

The Bigger Investment Picture

Artificial intelligence is still in the early stages of transforming the global economy.

Some companies will benefit enormously from the technology while others may be disrupted.

Travaglino believes investors should take a balanced approach when evaluating how AI could affect their portfolios.

“There’s going to be winners and losers,” he said. “It’s too early to tell who those winners and losers are going to be, but there are going to be ones that emerge as better businesses.”

For investors navigating this uncertain landscape, securitized credit may offer an appealing combination of income, diversification, and exposure to real economic activity.

Rather than trying to predict which technology companies will dominate the next phase of artificial intelligence, these investments focus on the underlying assets that support everyday life and economic growth.

In a market increasingly shaped by digital disruption, that real-world foundation could provide an important layer of stability.