Ardian’s AI Caution: Why Some Software Deals No Longer Make the Cut

French private equity firm Ardian has signaled a notable shift in its investment strategy: it will decline certain software deals because of the risks posed by artificial intelligence (AI). This move highlights growing unease among investors about how rapidly evolving AI technology can disrupt traditional software business models and create uncertainty around future revenues.

Ardian’s decision may seem surprising given its long history of software investments. But as AI reshapes the competitive landscape, investors are weighing not just opportunity, but risk—and in some cases that risk now outweighs potential returns.

The New Calculus for Software Investments

According to Ardian’s Deputy Head of Private Credit, Guillaume Chinardet, the firm has traditionally been active in software markets and has “no plans to stop investing” in the sector. Yet, Chinardet acknowledged that AI risk has become “clearly evident” in Ardian’s investment analyses, leading the firm to reject opportunities in specific software sub-sectors where AI threatens core business assumptions.

This cautious stance reflects a broader trend in private capital markets, where AI’s transformative impact is prompting deeper scrutiny from investors, lenders, and credit managers alike. That scrutiny is no longer limited to public technology stocks; it’s now penetrating the private markets that drive buyouts, growth financing, and direct lending.

AI Risk: Market Fears or Fundamental Change?

At the heart of Ardian’s caution lies a fundamental question: is AI a risk to software revenue models—or just another competitive factor?

Many industry observers argue that AI will create value, streamline workflows, and unlock new efficiencies. But for investors focused on predictable cash flows and long-term debt servicing, the uncertainty around AI’s impact on subscription contracts and customer retention is unsettling.

AI tools today are capable of automating tasks traditionally performed by enterprise applications—from data analysis and legal research to coding and HR workflows. This has led some investors to speculate that certain software offerings could see their value proposition erode if AI alternatives prove compelling and cost-effective. Those fears are already affecting investor behavior: private equity firms are conducting more rigorous due diligence on software holdings, reassessing exit timelines and return forecasts in light of emerging AI capabilities.

Meanwhile, lenders in the debt markets are pricing in these risks. Software companies are facing higher borrowing costs and tougher scrutiny from banks and institutional lenders due in part to worries that AI could disrupt traditional revenue streams and heighten default risk—a dynamic that extends beyond Ardian’s private credit strategy.

Broader Market Repercussions

Ardian’s position is not an isolated reaction. Public software stocks have experienced significant volatility over the past weeks and months amid similar concerns. Many firms in major indexes have seen share prices slide as investors reassess valuations in a world where AI could automate core functions that once required licensed software. In some cases, this sell-off has been attributed directly to fears of AI-induced disruption, rather than fundamental earnings deterioration.

These market movements underscore the tension between optimism about AI’s capabilities and caution about its risks. On one hand, AI integration promises to enhance productivity and unlock new use cases; on the other hand, it raises questions about the sustainability of traditional software revenue models that rely on recurring subscription fees and predictable renewal patterns.

There are early signs that some software sectors may adapt. Partnerships between emerging AI firms and established software providers, for example, recently helped buoy some stocks after a period of sharp declines. Investors interpreted these collaborations as evidence that AI could augment, rather than replace, established enterprise software suites.

Strategic Caution or Market Overreaction?

Critics of the “AI risk” narrative suggest that markets—and by extension some investors—may be overreacting. Detailed analysis of company disclosures, including SEC filings from major software firms, shows that many executives are framing AI as an integrative opportunity rather than a core business threat. In those filings, AI is frequently positioned as a way to enhance existing offerings and improve margins, not diminish revenue or replace key product offerings. This discrepancy raises the possibility that market sentiment may be pricing in worst-case scenarios that companies themselves do not explicitly project.

Still, sentiment and risk pricing often drive investment decisions just as much as fundamentals—especially in markets where uncertainty is high. For private credit investors like Ardian, whose returns depend on both principal repayment and stable cash flows, the calculus is even more conservative. With software historically accounting for a significant share of private equity and direct lending portfolios, the stakes are substantial.

What Comes Next?

Ardian’s decision to decline certain software investments due to AI risk sends a clear message: investors are not ignoring AI. They are redefining due diligence and portfolio strategy in response to it.

This strategic caution is likely to persist as AI continues to evolve. Investors will increasingly segment software sub-sectors based on AI exposure, growth resilience, and the adaptability of business models. Some areas—like AI-enabled productivity platforms or hybrid service-software models—may emerge as investment favorites, while others, particularly legacy or narrowly defined SaaS products, could struggle to attract capital.

Regardless of where individual firms land, the common denominator is a more rigorous, risk-adjusted approach to technology investing—one that recognizes AI not just as an innovation, but as a potential disruptor of traditional models. Whether that caution proves prophetic—or overly conservative—remains one of the central investment questions of 2026.