In this episode of The Bridge, Sonali Basak, Chief Investment Strategist at iCapital, sits down with David Breach, President of Vista Equity Partners, to discuss why AI is rewriting the rules of software economics. Breach explains how AI is pushing the long-standing Rule of 40 toward a new bar closer to a Rule of 60 or 70, resetting valuations and raising expectations for what a high-quality software company actually looks like. As he sees it, the so-called "SaaS apocalypse" missed the point. AI isn't displacing software, it's structurally lifting both growth and margins at once.
The conversation also explores why cost rather than capability may be the real choke point in AI adoption, and why matching the right model and chip to the right job has become central to protecting profitability. Breach makes the case for the underappreciated edge incumbents hold through trusted data relationships, distribution, and embedded workflows, and why the biggest long-term opportunity lies not in chips or models but in the application layer. His conviction is that as AI reshapes software, the companies that translate it into measurable performance will capture the majority of the value, while laggards see downside.
