EQT: AI divides the software market into winners and losers

Eric Liu, co-chairman for private capital at the EQT investment group, spoke on Bloomberg Open Interest on July 1, 2026 — one of the leading media platforms for discussing global capital flows. The key theme: how artificial intelligence is changing the very principle of company selection for direct investment portfolios.

Why

Has AI Divided the Software Market into Winners and Losers?

According to Liu, AI is creating a widening gap between companies in the software sector. On one side are those who embed new capabilities into their products and operational processes, reduce costs, or create fundamentally new offerings for customers. On the other are companies that continue operating under the old logic and gradually lose ground under pressure from technologically more advanced competitors.

For PE investors, this means a fundamentally new layer of analysis when assessing assets. The traditional diagnostic toolkit — revenue dynamics, EBITDA margins, customer base growth rate — is no longer sufficient to predict business sustainability over a five-to-seven-year horizon. Standard metrics are now supplemented by an increasingly weighty question: how ready is a given company to compete under AI pressure, and won't its product be displaced before the investment pays off?

Liu specifically highlighted two sectors with particularly complex combinations of opportunities and regulatory risks — technology and healthcare. In both, AI opens significant potential, yet they attract heightened regulatory attention: antitrust authorities in the tech sector, payment oversight and standards agencies in medicine. EQT, according to Liu, is building a specialized approach to monitoring these risks as part of standard portfolio management.

Why Don't Quality Assets Lose Liquidity?

The global PE exit market in 2025-2026 is experiencing a cooldown compared to the peak of the low-rate era. The IPO window has become unstable, strategic buyers are cautious, debt financing conditions have changed. Nevertheless, Liu points to a persistent pattern: high-quality assets continue to find buyers regardless of the overall market environment.

Market slowdown hits the median asset, not the best. Companies with proven competitive moat, stable growth, and predictable cash flows remain desirable — both for strategic buyers and for other PE funds willing to pay for predictability.

It is precisely the AI divide in the software sector that intensifies this polarization. Winners — companies that convincingly embedded AI into the core of their offering — become increasingly valuable assets. Losers, by contrast, face double pressure: operational from competitors and valuation from investors, who factor in growing business model vulnerability into their discount.

According to Liu, the ability to distinguish between these two types of assets — companies with real competitive moat and companies whose results look convincing only on the surface — is becoming one of the key skills of a PE investor under current conditions.

What This Means

The perspective of EQT's leadership captures a systemic shift: AI has ceased to be a thematic investment trend and has become a basic parameter for assessing assets in direct investment. For funds, this means both heightened caution toward transitional businesses and increased interest in companies that have already moved to the sustainable side of the AI divide — where new technologies work for the business, not against it.