Private Equity’s Giant Software Bet Has Been Upended by AI (3)

Apollo Global Management’s John Zito left the audience of investors stunned.

Addressing a gathering in Toronto last fall, he said that the real threat for private capital markets wasn’t tariffs, inflation or a prolonged period of elevated interest rates. Rather, he said, “the real risk is — is software dead?”

Zito’s comments, being reported for the first time, marked a forthright challenge to one of private equity’s most entrenched assumptions. For years, investors have funneled hundreds of billions into software businesses, banking on steady growth and resilient, recurring revenues. But the artificial intelligence revolution is now testing that foundation.

As ...