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# Ares Management: Half of All Software Companies Will Disappear
- URL: https://wire.fourthweb.ai/ares-management-half-of-all-software-companies-will-disappear/
- Published: 2026-09-09T15:00:44.000Z
- Updated: 2026-09-09T15:00:44.000Z
- Description: The AI extinction event for software companies didn't happen—it created a sorting mechanism instead. Blair Jacobson of Ares Management says the software industry has bifurcated seven to nine months after investors feared AI would "eat all software"
- Author: Travis Wright
- Tags: AI Agent Economy, Agentic Workflows, AI Agents

**The AI extinction event for software companies didn't happen—it created a sorting mechanism instead.**

### The Summary

- [Blair Jacobson of Ares Management says the software industry has bifurcated](https://www.bloomberg.com/news/videos/2026-09-09/ares-jacobson-sees-bifurcation-in-software-industry-video?ref=wire.fourthweb.ai) seven to nine months after investors feared AI would "eat all software"
- [The market panic earlier in 2026](https://www.bloomberg.com/news/videos/2026-09-09/ares-jacobson-sees-bifurcation-in-software-industry-video?ref=wire.fourthweb.ai) has resolved into a clear divide between winners and losers
- If you're running a software company or investing in one, the question isn't whether AI matters—it's which side of the split you're on

### The Signal

Earlier this year, the software investment thesis collapsed into a single question: will AI eat this? [Ares Management co-president Blair Jacobson](https://www.bloomberg.com/news/videos/2026-09-09/ares-jacobson-sees-bifurcation-in-software-industry-video?ref=wire.fourthweb.ai) watched investors dump software stocks across the board, treating the category like it was facing an extinction event. The logic was simple and brutal. If AI can write code, summarize documents, and automate workflows, what's left for a $50 billion SaaS industry to sell?

But nine months later, the answer is in. Not extinction. Division.

> "The general view was all software will get eaten by AI. Seven, eight, nine months later, we've actually seen a bifurcation in that market."

[Jacobson's comments at the IPEM conference in Paris](https://www.bloomberg.com/news/videos/2026-09-09/ares-jacobson-sees-bifurcation-in-software-industry-video?ref=wire.fourthweb.ai) point to a sorting mechanism that's already complete. Some software companies are getting crushed. Others are accelerating. The difference isn't random. It's architectural. Companies that built software to replicate human labor, especially repetitive knowledge work, are watching [AI agents](https://wire.fourthweb.ai/tag/ai-agents/) do the same job for a fraction of the cost. Companies that built platforms where AI agents can plug in, orchestrate, and scale are becoming infrastructure.

The split reveals what Web4 actually looks like in practice:

- Software that competes with agents loses to cheaper, faster automation
- Software that enables agents becomes the rails they run on
- The middle ground—tools that are "AI-enhanced" but still human-dependent—is shrinking fast

This isn't about whether your product has an AI feature. It's about whether your business model assumes humans are doing the work. If yes, you're on the wrong side. If your software is the place where agents execute, coordinate, and transact, you're infrastructure now. And infrastructure always wins when the landscape shifts.

### The Implication

If you're investing in software or running a software company, the bifurcation Jacobson describes is the sorting hat. Look at your revenue model. Are you selling to humans who do work, or are you selling to systems that coordinate work? The first category is repricing downward. The second is repricing upward.

For builders in the agent economy, this is the green light. The panic has passed. The market knows what it's looking for now. Build the rails, the orchestration layers, the places where agents need to plug in to get things done. That's where the capital is going next.

### Sources

[Bloomberg Tech](https://www.bloomberg.com/news/videos/2026-09-09/ares-jacobson-sees-bifurcation-in-software-industry-video?ref=wire.fourthweb.ai)