It turns out that even going as far as to shove “AI” into your company name is not enough to make a business immune to market fears that tech giants developing artificial intelligence are about to eat your lunch.

Take Pinewood.AI, which describes itself as a provider of “a secure end-to-end cloud-based ecosystem designed to help you unlock automotive business value and drive performance and profitability”. What does that mean in English? In essence, the FTSE 250 company is a supplier of software to car dealerships and the big vehicle manufacturers, promising to streamline and automate the various steps it takes to flog a motor, from managing sales leads and handling supplier invoices to identifying after-sales opportunities such as servicing.

Originally called Pendragon, it changed its name to Pinewood Technologies two years ago after selling its chain of UK dealerships to its American rival Lithia in a £367 million deal that left the British company focused on its software business.

To hammer home this pivot to tech, in October 2024 it announced it was rebranding its customer-facing operations with the whizz-bang sounding Pinewood.AI, and now refers to itself by this (not very) snappy name in corporate updates.

Fast-forward to January this year and it looked like Pinewood was poised to become the latest company to delist from the London Stock Exchange, after it emerged that the private equity firm Apax was in talks about buying the business for about £575 million, or 500p a share, causing Pinewood stock to motor sharply higher.

Now, however, the shares have gone into reverse, crashing by almost 33 per cent yesterday after Apax walked away from a deal, citing “the prevailing challenging market conditions”.

You don’t need ChatGPT to work out that this is a polite reference to the sell-off that has knocked shares in companies across a range of industries, from software to wealth management, that investors fear could have their businesses destroyed, or at least seriously disrupted, by the advent of AI.

The worry is that models developed by tech companies such as Anthropic — which was one of the triggers for the market rout when it revealed tools aimed at automating tasks from legal work to financial analysis — will kill off a variety of businesses, including so-called “software as a service” (SaaS) providers like Pinewood.

It’s led to what looks like indiscriminate selling, with companies including London Stock Exchange Group and Relx — which can make good arguments that their vast troves of proprietary data are made more valuable by the rise of AI — suffering big share price hits.

So is Pinewood about to be run off the road? That seems doubtful, at least in the short term. Pinewood’s last set of annual results, for 2024, points to the stickiness of its customer-base: its total users rose by 6.3 per cent to 35,200 and churn among existing clients was only 1.1 per cent. Recurring revenues that year also accounted for 86.5 per cent of the £31.2 million total.

This reflects the fact that its software is typically deeply embedded within a dealership’s business, meaning it would probably take a great effort for a customer to extricate itself. As an incumbent player, Pinewood has also amassed the industry relationships and datasets that would give it an advantage over an outsider seeking to disrupt its market.

Then there’s the fact that, as its rebrand suggests, Pinewood is developing its own AI offering, having last year spent $42 million acquiring Seez, a Dubai-based start-up behind several AI-powered tools for car dealers including a chatbot tailored for the motor industry.

Still, it’s no wonder Apax has walked away, what with the current turbulence in software stocks. Under City rules, the private equity firm is now barred from making a bid for six months, unless certain conditions are met. Perhaps by then it will be clearer whether the “SaaS-pocalypse”, as the AI-fuelled sell-off in software stocks has been dubbed by traders, really is coming for companies like Pinewood.

A winning bet

Have bosses at Plus500 called the top for shares of the financial betting company?

Last week, the stock, which has been on a tear, reached a record high of £49.34. Now, David Zruia, its chief executive, Elad Even-Chen, the finance chief, and Nir Zatz, its marketing head, are together offloading 1.5 million shares, which were worth a combined £70.7 million at last night’s closing price.

The disposal of 2.14 per cent of the FTSE 250 business is notable not just because it comes so soon after the stock’s peak, but also because it’s the first time the trio have cut their stakes since Plus500’s initial public offering 13 years ago, when its shares made their debut at 115p apiece.

They’re selling now “for personal financial and tax planning purposes”, Plus500 said, and the trio will be left holding a combined stake of 3.89 per cent. They’ve also agreed not to sell further shares for a year.

There have been plenty of winners from the Plus500 story. Even before the share sale, they included Zruia and Even-Chen, who receive generous pay packages from the business, despite frequent revolts from shareholders against Plus500’s executive remuneration plans. In 2024, they each earned about $5 million.

Plus500 has also handed back about $2.9 billion to stock market investors through dividends and share buybacks since its IPO.

The losers? The 76 per cent of retail investors who, according to the warning on Plus500’s website, lose money trading its high risk contracts-for-difference.

benjamin.martin@thetimes.co.uk

Alistair Osborne is away