Thoma Bravo Predicts AI Software Boom as SaaSpocalypse Ends

Private equity firm Thoma Bravo, led by CEO Orlando Bravo, has declared the “SaaSpocalypse” — a period of turmoil for software-as-a-service (SaaS) companies — is over, citing an emerging AI-driven boom in the sector. The statement, reported by CNBC on June 9, 2026, marks a shift in sentiment for a industry that faced significant valuation declines in 2022 and 2023 amid economic headwinds and investor caution.

Bravo, who oversees a $50 billion portfolio focused on technology investments, told CNBC that AI adoption is accelerating growth for software firms, particularly those integrating machine learning and automation into their platforms. “The SaaSpocalypse was a correction, not a collapse,” he said. “AI is now the catalyst for reinvention, and we’re seeing software companies that pivot to this technology outperforming their peers.”

The firm’s perspective aligns with broader market trends. The iShares North American Tech-Software ETF (IVV) and the iShares Expanded Tech-Software Sector ETF (IYW) have both seen year-to-date gains of 12% and 14%, respectively, as investors bet on AI-enabled software solutions. Thoma Bravo’s own investments in companies like Snowflake and Atlassian have reportedly benefited from this shift, though the firm has not disclosed specific portfolio details.

What Caused the SaaSpocalypse?

The SaaSpocalypse refers to the sharp downturn in SaaS valuations that began in 2022, driven by rising interest rates, reduced venture capital funding, and a slowdown in digital transformation spending. Many SaaS companies, which had previously relied on high-growth narratives, struggled to meet earnings expectations as customers delayed renewals or scaled back tech budgets.

Thoma Bravo’s analysis suggests the sector has entered a “recovery phase” fueled by AI. The firm’s research, shared with CNBC, highlights that 68% of its portfolio companies have launched AI-powered features since 2024, with 43% reporting increased customer retention rates. “AI isn’t just a buzzword anymore,” Bravo said. “It’s a productivity tool that’s reducing costs and unlocking new revenue streams.”

Industry analysts have noted a similar trend. A June 2026 report by Gartner found that 72% of software firms now prioritize AI integration, up from 35% in 2022. The report also projected that AI-driven SaaS solutions will account for 30% of the sector’s revenue by 2028, compared to 8% in 2023.

How Is AI Reshaping the Software Industry?

AI’s impact is most evident in areas like predictive analytics, cybersecurity, and customer relationship management (CRM). For example, Salesforce’s recent release of Einstein AI tools has been credited with boosting user engagement by 22%, according to a May 2026 internal memo. Similarly, Microsoft’s Azure AI services have seen a 50% increase in adoption since 2025, according to the company’s quarterly earnings report.

Thoma Bravo’s investments reflect this shift. The firm has recently acquired stakes in AI-focused startups like Hugging Face and Databricks, both of which have seen surging valuations. Hugging Face, which provides open-source AI models, reported a 200% year-over-year revenue increase in Q1 2026, while Databricks, a data engineering platform, saw its user base grow by 35% in the same period.

However, challenges remain. Concerns about AI ethics, regulatory scrutiny, and the high cost of implementation could slow adoption. The European Union’s AI Act, which takes effect in 202