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Thoma Bravo co-founder Orlando Bravo<\/a> on Tuesday said that artificial intelligence<\/a> will disrupt software companies<\/a> faster, and some of the hits to valuation are “very warranted.”<\/p>\n “There are many, many software companies in the public markets that will be disrupted from AI,” he told CNBC’s Leslie Picker<\/a> at Thoma Bravo’s investor meeting in Miami. “Those companies were going to be disrupted anyway.”<\/p>\n Bravo did not name the companies he felt deserved lower valuations or those that were in danger of disruption.<\/p>\n Thoma Bravo<\/a> is a software-focused investment firm founded in 2008. As of December, the firm had over $183 billion in assets under management in 77 companies.<\/p>\n Software stocks have been hit hard as AI model companies have released tools that threaten to replace those services at a much lower cost. The iShares Expanded Tech-Software Sector ETF (IGV<\/a>), which tracks the industry, is down roughly 28% from its all-time high in September.<\/p>\n Bravo said that some software names, however, took “unjustified” hits from the sell-off and are “phenomenal businesses that are actually going to be big winners in the agentic era.”<\/p>\n “Those companies have been severely punished when they shouldn’t have been,” he added.<\/p>\n Bravo did not name those companies.<\/p>\n Apollo Global Management<\/a> President John Zito recently criticized “arrogance” in software valuations<\/a> by private equity firms, the Wall Street Journal reported Sunday<\/a>. <\/p>\n Zito specifically highlighted Bravo’s $6.4 billion acquisition<\/a> of software firm Medallia in 2021.<\/p>\n Bravo told CNBC that his firm overestimated Medallia’s growth rates in its acquisition.<\/p>\n “We made a mistake, and that caused us to pay too much,” Bravo said.<\/p>\n