Orlando Bravo on AI’s 'giant sucking sound'
The death of software has been greatly exaggerated, said the managing partner of PE firm Thoma Bravo, who has more riding on its comeback than perhaps anybody in the world.
Orlando Bravo, the head of Thoma Bravo with a $170 billion investment portfolio, primarily in software, warned that the industry is facing a tough period due to AI's capabilities. Bravo noted that software has been doubted four times before, but it always rebounded. He attributed the current market freeze to CEOs' reluctance to sell at the bottom and private-equity firms struggling to raise debt.
However, the market seems to be thawing, evidenced by recent deals like Schneider's $23 billion acquisition of PTC and a $6 billion takeover by a Thoma-backed competitor of the AI cybersecurity firm Varonis. Bravo emphasized that the key factors in software's value are domain expertise and the difficulty of replication. He highlighted that Dayforce, a company Thoma Bravo acquired, offers services rather than proprietary code.
Bravo also mentioned that upcoming IPOs from major AI players, such as Anthropic and OpenAI, could crowd out other potential buyers from the capital markets, posing challenges for the private equity industry, which is currently holding an estimated $3.8 trillion worth of unsold companies.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
