Proprietary Data Shields Software Leaders From AI Disruption, S&P Says

S&P Global Ratings said artificial intelligence (AI) is likely to impact software companies on a case-by-case basis rather than causing a sector-wide decline in credit ratings, Bloomberg reported Thursday (March 12).

The software companies most at risk of credit rating downgrades are those with near-term maturities coming due in 2027 or 2028, and those whose products are most vulnerable to replacement by AI because they are less differentiated and rule-based, the report said, citing S&P Global Ratings analysts.

The companies least likely to be disrupted by AI are those with sector expertise and proprietary data, according to the report.

“Today’s environment reflects structural technological evolution rather than an abrupt macroeconomic shock,” the analysts said, per the report.

It was reported Wednesday (March 11) that JPMorgan marked down the value of loans to software companies in the portfolios of private credit lenders because the companies are seen as vulnerable to the effects of AI.

On Feb. 23, it was reported that software makers are delaying debt deals amid steeper borrowing costs and tighter lender scrutiny and that this trend is happening amid the mounting pressure from AI that has threatened the business model of these companies.

According to the report, software companies have already paused or held off on fundraising because lenders and investors expect upheaval from AI.

It was reported Feb. 4 that more than $800 billion in market value had been wiped out of the enterprise software sector after Wall Street analysts pointed to the disruptive potential of new enterprise AI tools designed to automate processes like contract reviews and legal briefings.

Software companies were also seeing their loan prices fall amid AI-related worries, amid investors’ concerns that AI advances, such as the coding capabilities of Anthropic’s Claude model, will make many software offerings redundant.

PYMNTS reported Monday (March 9) that Anthropic’s launch of a marketplace for enterprise AI tools represents a challenge to software-as-a-service giants.

The marketplace allows companies with existing spending commitments to apply a portion of those funds toward Claude-powered applications built by third-party developers.

The move is one of the first attempts by a foundation model provider to evolve into a platform company, extending its commercial footprint beyond model access to applications built on top of it.