Singapore licensed fund manager
Insights
Thematic Research - Sorting the Software sector
By
Kenny Tan
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Sorting the Software sector - AI Exposure, Defensibility, and Where Singapore Sits
The rapid development of AI technology over the past few years has posed a direct threat to the software sector, leading to a broad derating of the sector as competitive advantages are being reassessed. This year, the development of agentic AI has threatened various SaaS companies as the viability of their business models is put to the test.
We find the risk is uneven. It is highest where customers pay for work AI can now do and where revenue scales with the number of people doing it. It is lowest where the supplier runs infrastructure or performs a role that the work must still pass through.
We evaluate 4 key AI-related risks, and 4 factors that protect software companies from this threat. We then apply this framework to Singapore's listed software landscape.
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