{"id":162540,"date":"2025-09-23T00:20:08","date_gmt":"2025-09-23T00:20:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/162540\/"},"modified":"2025-09-23T00:20:08","modified_gmt":"2025-09-23T00:20:08","slug":"constellation-software-holds-call-to-address-investor-concerns-about-ai","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/162540\/","title":{"rendered":"Constellation Software holds call to address investor concerns about AI"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Constellation Software founder and president Mark Leonard cautioned against trying to predict the future of artificial intelligence.Ryan Remiorz\/The Canadian Press<\/p>\n

Constellation Software Inc. CSU-T<\/a> held a rare conference call on Monday to assuage investor worries about the impact of artificial intelligence<\/a> on its business. Judging from the market reaction, the company has more work to do.<\/p>\n

Founder and president Mark Leonard set up the call after one of Constellation\u2019s largest shareholders requested a question-and-answer session about AI. A serial acquirer<\/a> of software companies targeting niche sectors, the Toronto-based Constellation has a stellar track record but concerns about the impact of AI<\/a> have recently dogged its share price, sending it down more than 18 per cent from a high in May.<\/p>\n

Constellation\u2019s stock price ended the day down 4.9 per cent. <\/p>\n

On a call with investors and analysts that stretched more than an hour and a half, Mr. Leonard cautioned against trying to predict the future of AI. Even Geoffrey Hinton, who has played a pivotal role in the development of the technology, hasn\u2019t been able to do so. \u201cYou and I will never know a tiny fraction about AI\u201d compared with Dr. Hinton, he said. <\/p>\n

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While Mr. Leonard avoided predictions, he emphasized the company is closely monitoring developments and integrating AI. He was joined by four Constellation AI experts that he identified only by first names to prevent them from getting \u201coverwhelmed by outreach from my shareholders and competitors.\u201d (Mr. Leonard himself has a reputation for avoiding media attention.<\/a>)<\/p>\n

Generative AI tools have become much more adept at writing and testing software code, and can even create functioning prototypes. That represents a potentially huge opportunity for Constellation, allowing it to develop software faster and at a lower cost. But it also means rivals can do the same. Constellation\u2019s own customers could use these tools to develop software, too.<\/p>\n

\u201cAI makes it potentially way more exciting for us to provide customization, but it also makes it much more likely that the client will do it themselves,\u201d Mr. Leonard said.<\/p>\n

Other executives on the call played down that possibility, emphasizing that Constellation has a close relationship with its customers and that AI is prompting them to work even more closely. One said that developing software requires a high degree of skill even with AI, and that Constellation is well-placed to do so.<\/p>\n

While AI coding tools today are helpful, they also have limitations, especially when working with the kinds of software developed by Constellation\u2019s business units. These programs can span tens of millions of lines of code, one executive said.<\/p>\n

When it comes to the future of software development, Mr. Leonard made no predictions there either. \u201cIt\u2019s difficult to say whether programming is facing a renaissance or a recession,\u201d he said. A massive improvement in efficiency could lead to more demand for programmers, he said, or an oversupply of talent.<\/p>\n

\u201cIf the 10X efficiency doesn\u2019t happen, if it\u2019s a 10-per-cent efficiency gain, you can imagine that there would be very modest changes to the current status quo,\u201d he said. <\/p>\n

While the market might not appreciate such uncertainty, some analysts were not too worried. \u201cThe company is taking a pragmatic approach to AI, much like they\u2019ve done with everything else that\u2019s made them successful,\u201d said Richard Tse, a technology analyst at National Bank Capital Markets. \u201cThat means there\u2019s nothing conclusive to say on the topic of AI at this point for them, which is being interpreted by the market as neutral to negative.\u201d<\/p>\n

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BMO Capital Markets analyst Thanos Moschopoulos wrote in a note after the call that Constellation is poised to benefit from AI. The company\u2019s expertise means it can identify areas that can be automated, \u201cwhich should ultimately make its software more useful to clients and mitigate the risk that they leave,\u201d he wrote.<\/p>\n

Mr. Leonard advised those on the call to think critically about claims related to the efficiency gains of generative AI. \u201cIt\u2019s really important to dig in and try and understand, to be an anthropologist, to observe and test the claims you hear,\u201d he said.<\/p>\n

Constellation also highlighted a few examples of internal use cases across its portfolio, including three separate initiatives using AI to analyze contracts of businesses it is looking to acquire. \u201cAll of them have been relatively modest efforts, and quite successful,\u201d he said. The company has also deployed AI for coding, sales and marketing, and customer service.<\/p>\n

About 3 per cent of the business units at Constellation reported having replaced employees with AI tools, \u201cwhich is lower than I thought, and I think is probably a good thing,\u201d Mr. Leonard said.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Constellation Software founder and president Mark Leonard cautioned against trying to predict the…\n","protected":false},"author":2,"featured_media":162541,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,49,48,49174,61],"class_list":["post-162540","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-streetwise","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/162540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=162540"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/162540\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/162541"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=162540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=162540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=162540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}