“Software is eating the world,” - according to Marc Andreessen back in 2011.
Private Equity certainly agreed.
Over the past decade, software companies have grown from 4% to 16% of total portfolio value, representing (at the very least) $810 billion* in cumulative investment. The share of PE funds investing in software has doubled.
Code automated manual processes into systems that could scale at near-zero marginal cost, and enabled a small dvd-rental business to become Netflix.
AI now claims to be doing the same for professional services, codifying human knowledge and judgment the way software once codified processes.
Work that once required years of training, from legal research to financial analysis, is increasingly being augmented (and in some cases performed) by models.
If AI can make services scale in the same way that software scaled operations and distribution, will the new economics of the service economy attract a new wave of investment?
(*) Assuming there were no exits.