Apollo CEO: I apologize to the lawyers, auditors, and consulting advisors present—you will face immense pressure from AI.
```
The impact of AI on the job market is spreading to the broader professional services sector.
On June 10, Bloomberg reported that Scott Kleinman, co-president of Apollo Global Management, warned that law firms, accounting firms, and consulting companies will be the next major targets for disruption by artificial intelligence, and the private equity industry needs to reconsider its investment logic in this area.
Kleinman issued this warning during a panel discussion at the SuperReturn conference in Berlin on Wednesday. He said plainly: “Apologies to the lawyers, accountants, and consultants here, but I do believe that is a sector under tremendous pressure.”
This statement quickly attracted market attention, as private equity funds have poured into the professional services sector in recent years, and related investments are now facing pressure for reevaluation.
At the same time, Kleinman revealed that Apollo has now significantly underweighted its software holdings, shifting capital toward critical infrastructure and businesses less impacted by AI, reflecting the company’s overall defensive credit posture.
Professional Services Become the Next “Bull’s-eye”
After AI has already deeply affected the software industry, Kleinman believes that professional services will be the next sector under pressure. He pointed out that private equity firms should carefully assess whether the core functions of their held professional service companies can be replaced or supplemented by AI.
This warning is not unfounded. In recent years, a large amount of private capital has flooded into professional services, especially the accounting sector, viewing it as a source of stable cash flow.
Take Cinven as an example: in 2024, the firm acquired a majority stake in Grant Thornton’s UK business. As AI capabilities continue to improve, the underlying logic of such investments is facing fundamental challenges.
Kleinman also emphasized that the impact of AI on the software industry is far from over. He noted that software companies will not “disappear,” but “AI-native” businesses will “over time put enormous pressure on traditional software operations.”
Even more alarming, the private equity sector’s valuation adjustments for software assets have significantly lagged behind the public markets. Kleinman said bluntly that private equity write-downs of software investments have not kept pace with public market declines, meaning potential valuation risks are still accumulating. He said:
“The private equity industry fell in love with software, buying these companies at sky-high prices, assuming they would grow forever and margins would expand forever, but we all know nothing grows to the sky. The issue is: How much will the next buyer pay for these companies, and will that price be close to the multiple you originally paid?”
Faced with these risks, Apollo has proactively adjusted its asset allocation direction. Kleinman said the company is directing funds toward critical infrastructure and businesses relatively less affected by AI, with a generally conservative credit strategy.
Analysts believe this shift reflects a systematic repricing of the disruption path of AI by top private equity firms—from focusing on software to now turning attention to professional services, as AI’s impact on traditional sectors continues to broaden.
Risk Warning and DisclaimerThe market has risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users’ special investment goals, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investments made accordingly are at your own risk. ```