AI agents could displace traditional applications and pressure portfolio company margins and revenue.
“AI companies have announced vertical-specific applications that challenge incumbents. It is possible that AI agents and autonomous AI systems could displace traditional business applications. Our portfolio companies may face margin pressure, customer churn, and declining recurring revenue if they fail to effectively integrate AI capabilities, differentiate their offerings from AI-native competitors, or adapt their technology platforms to meet evolving customer expectations for AI-powered functionality.”