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Is the AI-Led Software Selloff Justified? (The Derby Mill Series ep 23)
How much risk do traditional software firms face from AI?
Feb 20, 2026
Nearly a trillion dollars in market value vanished from software and services stocks after a Reuters headline framed AI as a potential existential threat to traditional software companies. In this episode of the Derby Mill Series, host Ajay Agrawal leads Rich Sutton, Niamh Gavin, and Suzanne Gildert in a focused discussion on whether that reaction reflects structural risk or market overreach.
Questions discussed:
—How much risk do traditional software firms face from AI?
—Was the AI-led selloff in software stocks justified?
—How will Gen AI change product cycles and the way organizations run?
—At the limit, will the idea of a company, with leadership and employees, even make sense anymore?
—How will the incorporation of AI technology into human physiology affect evolution?
—Are we heading toward a speciation event that see new classes of humans emerge?
GUESTS AND HOSTS
Ajay Agrawal, co-founder and partner, Intrepid Growth Partners
Richard Sutton, senior advisor, Intrepid Growth Partners, 2024 Turing Award recipient, pioneer of reinforcement learning and professor, University of Alberta
Niamh Gavin, senior advisor, Intrepid Growth Partners, Applied AI scientist and CEO, Emergent Platforms
Suzanne Gildert, founder and CEO, Nirvanic Consciousness Technologies
LINKS
Selloff wipes out nearly $1 trillion from software and services stocks as investors debate AI's existential threat
Threat of New AI Tools Wipes $300 Billion Off Software and Data Stocks
Software Selloff Hits Industry’s Billionaires
The Software Rout Is Spreading Pain to the Debt Markets
Mentioned in the episode: The Innovator’s Dilemma
Subscribe to The Derby Mill Series at our Substack (main site) or on YouTube, Spotify or Apple Podcasts
Derby Mill is created by the team at Intrepid Growth Partners and produced by Ghost Bureau.
DISCUSSION POINTS
00:00 Introduction to software selloff and AI discussion
02:38 Niamh on AI-native approaches and incumbents
06:35 Wall Street reaction and software risk
08:37 Innovator’s dilemma and challenges
10:39 Data moats and Gen AI product cycles
11:47 Foundation models capturing end-user workflows
14:10 Rich on legacy systems and moats collapsing
16:29 Summary: selloff directionally correct
17:31 Suzanne on AI-human hybrids and future work
20:12 Speciation, societal impacts, and UBI discussion
24:41 Niamh and Rich on company adaptation
26:06 Episode wrap-up and key takeaways
DISCLAIMER
The content of this podcast is for informational and educational purposes only and should not be construed as marketing, solicitation, or an offer to buy or sell any securities or investments. The opinions expressed in this video are those of the participants and do not necessarily reflect the views of Intrepid Growth Partners or its affiliates. Any discussion of specific companies, technologies, or industries is for illustrative purposes and does not constitute investment advice. Viewers are encouraged to consult with their own financial, legal, and tax advisors before making any investment decisions.
The Derby Mill Series
Intrepid Growth Partners’ Senior Advisors Rich Sutton (pioneer of reinforcement learning), Sendhil Mullainathan (MacArthur Genius recipient), and Niamh Gavin (Applied AI scientist) join Intrepid partner and co-founder Ajay Agrawal to explore what’s possible with the entrepreneurs implementing AI-based solutions and pushing out the productivity frontier.
Other Resources
