AI — a technology cycle or a competitive reset?

Recent research from PitchBook frames AI as the beginning of a multi-decade technology cycle—one that could create enormous value and reshape industries, but also carries a stark message about the potential for value destruction.

The latest PitchBook Research report states:

“We believe we are at the beginning of a technological revolution that will span more than 50 years and create thousands of new unicorns and multi-trillions of dollars in enterprise value. It will also destroy hundreds, if not thousands, of companies and permanently transform work and life throughout the world.”

We agree with the direction. But from our perspective—working with founders and investors in live situations—the more immediate reality is sharper.

AI is not simply creating opportunity. It is resetting how value is built, scaled, defended and ultimately realised.

The market is moving ever faster

The report highlights where capital is flowing: foundation models, data infrastructure, agentic commerce and AI-enabled vertical applications.

We are seeing similar themes in the market. But what matters is not simply where capital is flowing. It is how quickly competitive advantage can now be created—and how quickly it can disappear.

AI is compressing build times, reducing the cost of launching products and dramatically accelerating product iteration. As a result, companies can reach apparent traction faster than ever before.

The problem is that this traction may also be less durable than it appears.

Speed is now table stakes

In previous technology cycles, speed itself could create separation. In AI, speed is increasingly universal.

Companies can build quickly, launch quickly and iterate quickly. Competitors can do exactly the same.

Speed is therefore becoming less of a differentiator and more of a starting point. This helps explain why many AI categories are already becoming crowded and, in some cases, rapidly commoditised.

The strategic question is shifting from how quickly can you build? to what advantage remains once everyone else can build just as quickly?

What actually drives value

Across transactions and conversations with founders and investors, a consistent pattern is emerging. The companies attracting sustained interest—and potentially premium valuations—are not simply those moving fastest.

They are businesses that own proprietary data, sit within critical workflows, become systems of record—or increasingly systems of action—and improve as they are used.

These are also characteristics identified in the PitchBook research as potential sources of enduring AI advantage. The important difference today is timing. Businesses may have far less time to establish these advantages before competitors arrive.

Defensibility can no longer be something that develops eventually. Increasingly, it needs to be designed into the business from the beginning.

The shift from tools to systems

One of the most important changes we are seeing is the transition from software as a tool towards software as execution.

AI increasingly does more than support a decision. It can interpret information, make decisions and take action. This is creating a new generation of systems of action that sit much closer to the operational outcomes businesses care about.

From an M&A perspective, that distinction matters. Once embedded into important workflows, these systems can become harder to replace, sit closer to measurable commercial outcomes and create deeper integration with customers.

That can make them strategically more valuable than standalone tools that remain relatively easy to substitute.

Why early traction is not enough

One of the biggest risks for founders today is misreading momentum.

AI enables faster growth, faster adoption and earlier signals of product-market fit. But the same forces enable faster competition, faster feature replication and faster pricing pressure.

What looks like success may therefore represent genuine early validation without necessarily demonstrating long-term defensibility.

Revenue growth still matters. Customer adoption still matters. But increasingly, the important question is what sits behind that growth—and whether the advantage can be sustained.

What this means for founders

The question is no longer simply: How quickly can we build and grow?

Founders increasingly need to ask:

What do we own? Where do we sit in the workflow? What improves with usage? What becomes harder to replicate as we scale? Can we become indispensable to the customer?

Because ultimately, speed can help create value. Durability determines how much of that value can be defended and ultimately realised.

What this means for exit

From an M&A perspective, this shift is already becoming visible.

Buyers will continue to care about revenue, growth rates and the scale of the addressable market. But those metrics alone provide an incomplete picture of long-term value.

Increasingly, strategic buyers and investors will also focus on embeddedness, proprietary data, workflow control and the durability of competitive advantage. These characteristics help determine whether growth can be sustained after a transaction—and whether the business being acquired represents a durable strategic asset or simply a temporary product advantage.

For founders considering an eventual exit, that means building for defensibility well before entering an M&A process.