Full Breakdown
Apollo Global Management Warns of Continued Turmoil in Software Sector Due to AI Disruption
3/20/2026, 2:07:13 PM
Overview of the Current Situation
David Sambur, co-president of Apollo Global Management, has issued a stark warning regarding the ongoing selloff in the software sector, attributing it to fears surrounding the disruptive impact of artificial intelligence (AI). During an interview with CNBC, Sambur expressed that the turmoil is far from over, stating, "I unfortunately think it's very early." The iShares Expanded Tech-Software Sector ETF (IGV), which has seen a modest rebound of approximately 3% in March, remains down 20% year-to-date, reflecting a broader crisis of confidence among investors.
Key Concerns in the Software Industry
Sambur highlighted several critical factors contributing to the uncertainty in the software industry. He pointed out that traditional software companies are facing intense scrutiny regarding their revenue models, gross margin profiles, and competitive environments, particularly in light of emerging competitors like Anthropic and OpenAI. The rapid evolution of AI technologies raises existential questions about which software business models will endure. Sambur noted, "The displacement from AI will be historic and is faster than I've ever seen at any point in my career."
Impact on Major Software Companies
The selloff has affected a range of companies across the software landscape, including major players such as Microsoft, Salesforce, and ServiceNow. These firms have experienced significant declines in their market capitalizations as investors reassess the implications of AI on their core business models. The uncertainty surrounding AI's potential to automate key functions has led to a reevaluation of growth rates, pricing power, and competitive dynamics within the sector.
Institutional Sentiment and Future Outlook
Sambur's remarks signal a cautious stance among institutional investors regarding software investments. Apollo Global Management, which oversees a $700 billion asset portfolio and has a substantial history of backing software deals, is now adopting a more conservative approach. This shift may indicate a broader trend among investors as they grapple with the implications of AI on traditional software business models.
Criticism & Opposition
While some market analysts have pointed to the recent rebound in the IGV ETF as a sign of recovery, Sambur remains skeptical. He emphasizes that the underlying issues affecting the software sector are not resolved and that the market's optimism may be premature. This perspective contrasts with those who view the rebound as a potential bottoming out of the market.
Verbatim Quotes
- “I unfortunately think it's very early,” — David Sambur, Co-President, Apollo Global Management
- “is faster than I've ever seen at any point in my career.” — David Sambur, Co-President, Apollo Global Management
- “David Sambur, the firm's co-president overseeing a $700 billion asset portfolio, delivered a sobering assessment of the industry's AI-induced turbulence during remarks this week, cautioning that the worst may not be over for software investors.” — David Sambur, Co-President, Apollo Global Management
As the software sector continues to navigate the complexities introduced by AI, the outlook remains uncertain, with significant implications for both investors and companies alike.
