AI Has Split the Software Market Into Leaders and Laggards, Says EQT

Eric Liu, co-head of private capital at the EQT investment group, spoke on July 1, 2026 at Bloomberg Open Interest, analyzing how artificial intelligence (AI) is creating a growing gap between companies in the software sector.

Why has AI split the software market into winners and losers?

According to Liu, AI is opening a widening gap between software companies. On one side are those that build new capabilities into their products and operations, cut costs, or create fundamentally new offerings for customers. On the other are companies that keep operating by the old logic and gradually lose ground to technologically more advanced competitors.

For PE investors, this means a fundamentally new layer of analysis when valuing assets. The traditional diagnostic kit of revenue dynamics, EBITDA margin and customer base growth is no longer enough to predict a business's resilience over a five-to-seven-year horizon. A question of growing weight is added to the standard metrics: how ready is a given company to compete under AI pressure, and could its product be displaced before the investment has time to pay off?

Liu singled out two sectors with a particularly difficult mix of opportunity and regulatory risk: technology and healthcare. AI offers significant potential in both, but both are drawing heightened regulatory attention: antitrust authorities in technology, and agencies overseeing reimbursement and standards in medicine. According to Liu, EQT is building a specialized approach to monitoring these risks as part of its standard portfolio work.

Why do high-quality assets keep their liquidity?

The global PE exit market is cooling in 2025–2026 compared with the peak of the low-rate era. The IPO window has become unstable, strategic buyers are cautious, and debt financing conditions have changed. Even so, Liu points to a persistent pattern: high-quality assets continue to find buyers regardless of the broader market backdrop.

The slowdown hits the median asset, not the best one. Companies with a proven competitive moat, steady growth and predictable cash flows remain sought-after targets, both for strategic buyers and for other PE funds willing to pay for predictability.

The AI rift in software is what sharpens this polarization. The winners, companies that have convincingly built AI into the core of their offering, are becoming more valuable assets. The losers, by contrast, face double pressure: operational pressure from competitors, and valuation pressure from investors who price in a discount for the business model's growing vulnerability.

According to Liu, the ability to tell these two types of assets apart, companies with a real competitive moat versus companies whose results look convincing only on the surface, is becoming one of the key skills of a PE investor in current conditions.

What this means

The EQT executive's view points to a systemic shift: AI has stopped being a thematic investment trend and become a baseline parameter for valuing assets in private equity. For funds, this means both greater caution toward transitional businesses and greater interest in companies that have already landed on the sustainable side of the AI rift, where new technology works for the business rather than against it.

Which companies benefit from AI adoption in the software market?

According to Liu, the winners are those that build new AI capabilities into their products and lower the cost of their operations.

How does AI adoption affect competitiveness in software?

Companies that embed AI in their products and operations gain an advantage through lower costs, while laggards gradually lose market position.

How does AI affect the software market?

According to EQT's analysis, AI divides the software market into two groups: companies that build neural networks into their products and operations, cut costs and grow; and the rest, who fall behind.