US software stocks suffered another wave of selling as investors intensified concerns that artificial intelligence could undermine traditional enterprise software models, according to data compiled by the Financial Times.

The FT reported that the S&P 500 fell 1%, while the Nasdaq Composite declined 1.1%. Among software names, Workday dropped 6%, CrowdStrike 10%, and Datadog 11%. IBM tumbled 13%, its largest one-day fall since 2000.

The sell-off quickly spread to alternative asset managers with significant exposure to technology through buyout portfolios and private credit lending. Ares Management, Apollo Global Management, and Blackstone each fell at least 5%. KKR declined 9%, while Blue Owl Capital dropped 3%, extending its year-to-date losses to roughly 30%.

The volatility follows heightened scrutiny of private credit vehicles, after Blue Owl permanently halted withdrawals in one of its funds earlier this month.

Technology remains a core exposure for private equity. Software accounted for approximately 18% of US buyout deal value in 2025, according to PitchBook data. Analysts warned that AI-driven disruption could weigh particularly heavily on leveraged loans and private credit portfolios with concentrated technology exposure.

Fitch Ratings reported that redemptions from private debt funds rose to 4.4% of net assets in the fourth quarter, up from 1.6% in the previous quarter.

The episode highlights the growing link between public market volatility and private capital valuations, as concerns over AI-driven commoditisation ripple through leveraged finance, fundraising activity, and exit timelines.

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