Could AI Disruption Fears Trigger a Software M&A Boom?

Feb 22, 2026

Brent Thill, a Jefferies software analyst who covers AI risks to SaaS, explains why fears of AI replacing enterprise software may be overblown. He discusses why large companies will keep many vendors, why infrastructure and security look resilient, and how weak valuations could spark a big wave of software M&A driven by private equity.

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INSIGHT

Market Overestimates AI Centralization

Markets fear that a few AI firms will replace hundreds of enterprise software vendors.
Brent Thill argues that enterprises want backups and won't hand control to just Anthropic or OpenAI.

INSIGHT

Infrastructure And Security Are Defensive

Infrastructure and security are the safest software sub-sectors amid AI disruption.
Thill names Microsoft, AWS, Google, Cloudflare and CrowdStrike as durable places to invest.

INSIGHT

Vibe Coding Can't Replace Critical Apps

Large enterprises won't easily replace mission-critical apps with AI 'vibe coding'.
Thill stresses incumbents hold data, interfaces and integration advantages that LLMs lack.

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In this week's episode of WSJ’s Take On the Week, co-host Miriam Gottfried and guest host Dan Gallagher, a tech columnist for Heard on the Street, chat with Jefferies software analyst Brent Thill about the recent turbulence in the business software market. They talk about the growing fears that AI will replace the need for traditional software-as-a-service, or SaaS, platforms like Intuit, Salesforce, and Workday. They analyze how the narrative around AI "vibe coding"—where businesses generate their own apps using simple text prompts—has led to a sharp selloff in cloud software stocks. They also note other factors weighing on the sector, including tech layoffs and the shift away from seat-based software pricing models and toward consumption-based metrics.

After the break, Thill explains why he thinks the market's fears over AI disrupting major enterprise software are overblown. They explore why large companies won't trust AI with critical systems for payroll, accounting or taxes. Then Thill makes the case for why AI infrastructure and security companies remain safe bets, and why the current tech selloff and depressed valuations are setting the stage for a massive tech M&A boom driven by private-equity firms.

This is WSJ’s Take On the Week where co-hosts Telis Demos, Heard on the Street’s banking and money columnist, and Miriam Gottfried, WSJ’s investing and wealth management reporter, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead.

Have an idea for a future guest or episode? How can we better help you take on the week? We’d love to hear from you. Email the show at takeontheweek@wsj.com.

To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or the video page of WSJ.com