Ares Management Executive Warns of Software Market Bifurcation
Ares Management executive Jacobson describes a software market split and a massive AI-driven capital expenditure super cycle requiring new digital infrastructure.
An executive at Ares Management, Jacobson, reports a growing bifurcation within the B2B software market. He explains that companies serving regulated industries with high costs of failure are successfully integrating AI to improve, while other firms face technological obsolescence. Jacobson cited Salesforce, Inc. as an example of a company where AI has positively impacted earnings.
Addressing broader economic trends, Jacobson warned of a maturity wall involving several hundred billion dollars in upcoming refinancing needs. He noted that while strategic companies will successfully refinance, others will struggle with higher capital costs.
Jacobson characterized the current era as the CapEx super cycle of our lifetime, fueled by an exponential increase in data usage and demand for digital infrastructure. To capitalize on this trend, Ares Management is developing its own data centers and campuses. He dismissed concerns regarding overinvestment, arguing that the current spending is strictly demand-driven.
