Private equity firms bet that software systems could replace people. Now they face an uncomfortable and unexpected question; could artificial intelligence replace their software?
Senior figures in the buyout industry are on high alert following the so-called ‘AI scare trade’ – an early-February sell-off in technology stocks.
The once white-hot software-as-a-service deals sector is largely on pause as investors scrutinise valuations in their portfolio amid anxiety over AI disruption.
“We think now there is a real referendum by limited partners on valuations of software and technology investments, and the onus is on general partners to justify them and ideally demonstrate them by delivering exits — however that may now be harder to do given the AI disruption risk,” says Alexis Maskell, global head of investor relations at BC Partners.
Read more here: https://www.penews.com/articles/the-software-referendum-private-equitys-tech-spree-faces-a-vote-of-confidence-477d6fe5
