By Ben Glickman
Wall Street executives have a message for investors: The demise of software businesses from artificial intelligence is greatly exaggerated.
Top leaders at major banks and investment firms are seeking to calm anxieties about AI's potential to render software businesses obsolete -- and playing down their own exposures to the sector.
"None of us at Apollo think that software is going away. In fact, we actually think software is going to be used a whole lot more. It's just a question -- what're you going to pay for it?" said John Zito, co-president of Apollo's asset-management arm, in an interview on CNBC Wednesday.
Still, he added that there will be winners and losers from a "very violent technology cycle" and cautioned against judging software companies by their current revenues, which are faring relatively well. "That's like saying when the iPhone 1 came out, that BlackBerry was still going to be fine," he said.
Shares of software companies including Salesforce and Adobe slid last week, wiping out hundreds of billions of dollars in market value in the sector. The selloff came after Anthropic announced new legal tools for its Cowork assistant to help with draft and research tasks, sparking worries about the fate of software providers of all stripes.
Salesforce and Adobe stocks were trading down again Wednesday.
Even before Anthropic's release, investors had been on edge about how the hundreds of billions of dollars being poured into AI investments might ultimately upend any number of industries. Among the businesses that seemed particularly vulnerable were software companies, which typically make money by charging subscription and licensing fees for use of their products.
For years, software businesses have been an attractive investment for private-equity firms and lenders, which seek out high-margin businesses with steady, recurring revenue. Plunging valuations for those software companies could mean big losses on firms' investments.
Robert Lewin, chief financial officer of investing behemoth KKR, said at a UBS conference earlier in the week that big asset managers' diversity of investments would help shield them from AI disruption. Still, he said the firm sees the risks posed by AI adoption and has sold some businesses in recent years.
About 15% of KKR's private-equity investments are exposed to software companies, or about 7% of its overall assets, Lewin said.
Goldman Sachs CEO David Solomon said Tuesday at the UBS conference that his firm's exposure to software investments is "insignificant in the scale of our overall platform."
He said his firm expects AI to disrupt the market, but that "the narrative over the last week has been a little bit too broad."
The AI trade itself has also come under more intense scrutiny, after powering stocks to record highs for three straight years, with investors worried that shares of tech giants are overvalued. Some investors are bracing for more volatility ahead.
In the software sector, Michael Chae, Blackstone's chief financial officer, said there would be "a range of outcomes" over time despite the "indiscriminate" recent trading against the broader industry.
"We expect larger, well-entrenched businesses to be better protected and, in many cases, beneficiaries of AI," Chae said at a Bank of America conference Tuesday.
Write to Ben Glickman at ben.glickman@wsj.com
(END) Dow Jones Newswires
February 11, 2026 12:22 ET (17:22 GMT)
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