Goldman Sachs – Will AI Eat Software, Mar 2026

This report discusses the impact of emerging agentic AI tools on the software industry.

It explores whether AI will disrupt or replace traditional software companies, concluding that AI is unlikely to completely 'eat' software but will cause significant transformation. Legacy software firms are innovating as fast followers and leveraging their competitive moats, which provide time to adapt but are not insurmountable. The report highlights uncertainty about the extent of transformation and durability of incumbent advantages, emphasizing the need for earnings stability to stabilize share prices. It also notes that stress in software-exposed credit is unlikely to trigger a credit default cycle turn and advises investors to be selective in sectors vulnerable to AI disruption.