Farallon Capital CIO Says AI Will Create Winners and Losers in SaaS Sector

Farallon Capital CIO Nicolas Giauque said AI will produce both winners and losers among software-as-a-service companies without causing a repeat of the 2008 financial crisis. Giauque noted that SaaS stocks have already declined more than 20 percent in the first two months of the year. He also pointed to concerns about private credit lending to these companies.

Giauque began his career in merger arbitrage, where he developed a focus on downside risk. The fund manages $44 billion in assets from its San Francisco base.

Giauque said customers will question recurring fees for products that amount to a simple database plus a form plus a dashboard. With AI expected to create both winners and losers across SaaS and broader tech markets, some investors are focusing less on picking individual stocks and more on overall portfolio positioning.