AI’s Limited Shake-Up: Less Than Half of Software Firms Face Disruption

Forget the hype—the AI revolution has a ceiling. New analysis reveals artificial intelligence will fundamentally disrupt less than half of all software companies. The rest? Business as usual, with legacy code and quarterly targets intact.

The Immunity of the Incumbents

It turns out core enterprise systems, specialized legacy platforms, and regulated infrastructure possess a surprising resistance. AI stumbles where complexity is king and compliance is non-negotiable. The tech might be smart, but it can't navigate a decades-old regulatory maze or untangle proprietary spaghetti code built for a single Fortune 500 client.

Where the Axe Actually Falls

The disruption targets are clear: customer-facing applications, data analytics suites, and commoditized development tools. Here, AI doesn't just augment—it replaces. It automates service desks, generates reports in seconds, and writes boilerplate code, rendering whole teams and their products obsolete. The shake-up is real, but its scope is narrowly defined.

The Finance of Fragmentation

This creates a bizarre market split. Investors are pouring capital into 'AI-native' startups promising to eat the world, while simultaneously bankrolling the very legacy firms deemed 'safe' from the onslaught. It's a hedge fund manager's dream—betting on both the earthquake and the untouched bedrock. A cynical play, but a profitable one.

The narrative of total industry transformation is collapsing. The future isn't a uniform AI takeover; it's a fragmented landscape where a privileged majority of software firms watch the storm from behind reinforced windows, their valuations—and their C-suites—perfectly secure.

AI will shake up less than half of software firms

According to Bravo, major software companies have dropped about 30% in value compared to last year, and the multiples investors pay for their free cash Flow have fallen sharply.

Bravo thinks AI technology will shake up less than half of all software companies, but many will still feel the effects. “AI will disrupt a percentage of software companies, less than half, is what we think, but it’ll be disruptive to many of them,” he noted. Companies that focus mainly on technical work face the biggest threat from AI tools that can do similar tasks.

Despite these concerns, Bravo made clear his company sees AI as a major force for change. Thoma Bravo is putting serious money behind AI from a business software perspective, he said, calling it “transformational” for the industry.

Last year, Bravo had warned that AI was creating serious worry among people who invest money for a living. Investment firms are having trouble figuring out which AI companies are actually worth the risk and which ones are just riding the HYPE wave.

The investment frenzy is showing up in some eye-popping deals

Anthropic, an AI company, just signed papers for a $10 billion funding round that WOULD put its total value at $350 billion this month, as reported by Cryptopolitan. Investment firms Coatue and Singapore’s GIC are leading this round.

That price tag is almost double what Anthropic was worth just four months earlier. Back in September 2025, the company had a valuation of $183 billion. Now it’s nearly twice that amount in a remarkably short time.

Even more unusual, Sequoia Capital is reportedly putting money into Anthropic even though it already backs OpenAI and xAI, two companies that compete directly with Anthropic. This breaks the old rule in venture capital about not investing in rivals at the same time.

The numbers from 2025 show just how much money was poured into AI. Global venture capital funding hit $425 billion for the year, jumping 30% from the year before, according to Crunchbase data. AI companies grabbed nearly half of all that money.

Five big AI companies each raised more than $5 billion in 2025, including OpenAI, Scale AI, Anthropic, and xAI. Together, these companies brought in $84 billion, which equals about 20% of every dollar that venture capitalists invested anywhere in the world last year.

OpenAI reached a $500 billion valuation, making it the most valuable private company ever recorded.

These massive numbers support what Bravo was saying about investors desperately trying to get into AI deals. With so much money chasing these companies, valuations keep climbing higher, even as questions remain about which businesses will actually succeed long-term.

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