Vista Equity says it is reinventing the way companies use artificial intelligence

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As fears of an AI infrastructure investment bubble grow, the next phase of AI growth will come from private software companies that are already seeing massive productivity gains, according to Robert Smith, CEO of Vista Equity Partners.

High ratings Nvidia, dead, Microsoft, alphabetOpenAI and other hyperscalers and large language models have dominated the debate about the opportunities and risks of AI. However, some of the biggest AI investment opportunities will be in non-public enterprise software companies that use specific agents, or “Agent AI,” to perform company tasks, according to Smith, who is also founder and chairman of Vista.

“AI has sucked a lot of oxygen out of the air for a lot of investors and pulled them into Mag 7,” Smith told CNBC. “These super-scalers are now starting to build infrastructure and capacity. Some might argue that they are overvalued in some ways. But [next] Wave will be app providers. This is how these courses usually took place. Application providers typically receive the lion’s share of the economic rent in the long run, once the technology spreads in those markets and spreads in those technologies. “That’s really where we are in the cycle.”

Vista’s aggressive bet on proxy apps and software highlights one of the fastest-growing corners of AI trading and alternative investing. Unlike the AI ​​infrastructure sector — which includes dozens of publicly traded companies, hyperscalers, and LLC entrepreneurs — the vast majority of companies creating AI applications are private companies. Smith said 97% of enterprise software companies are private companies.

Vista aims to take the lead in the enterprise agent revolution. The private equity firm, which has $100 billion in assets under management and more than 90 enterprise software companies, has created an “agent factory” to spread AI across its companies and transform their businesses. Smith said 30 Vista companies are generating revenue from shifting to agentic AI, and another 30 or 40 will switch in the coming months.

“Over two and a half years ago, we built the infrastructure,” Smith said. “We now have the right partners to do this: hyperscalers, who have the capabilities and technology capabilities that we can then infuse into each of our companies to make this a reality.”

One example is a Vista wallet company called SimplePractice. The company’s software helps mental health professionals, using agents to record sessions and transcribe and draft notes. Another Vista company, called Reslinc, helps companies assess their potential exposure to tariffs and meet regulatory requirements.

Vista’s approach challenges the theory that AI will “eat up software,” as Nvidia CEO Jensen Huang predicted in 2017. While it may undercut many SaaS companies and allow companies to program and perform many software tasks themselves, agent AI will accelerate the growth of enterprise software tools that can perform tasks with high levels of accuracy, Smith said.

“Artificial intelligence will enable enterprise software to handle services,” he said.

The gains in productivity and profits from agentic AI are already evident. Vista portfolio companies are seeing 30% to 50% productivity gains in writing code, Smith said. He said that some tasks that take a person hours to do can be done in seconds using artificial intelligence. “Heuristics,” or running an AI model for 20 cents, can lead to savings of up to $10, he said.

While some jobs will be eliminated, of course, Smith said others will be created or reinvented.

“All knowledge workers will be affected in some way,” he said. “For some, there won’t be that job category. For some, it will be an over-acceleration of their capabilities. I tell people, AI will not replace the job in some company, but the person using AI will replace your job.”