Marc Rowan on Private Markets, Software Repricing, and Capital Allocation

Marc Rowan on Private Markets, Software Repricing, and Capital Allocation – The a16z Show

Market views

Bullish

PRIVATEMKTS— Private markets offer the only real diversification opportunity as public markets become increasingly concentrated, with 10 stocks representing nearly 50% of S&P and multiple trillion-dollar private companies (Anthropic, OpenAI, SpaceX) that most investors have zero exposure to.
DATACENTER— Data centers are a major driver of Apollo's business in 2025-2026, with proof of concept established and massive capital deployment underway as part of the industrial renaissance requiring financing.
ENERGY— Energy infrastructure is a core component of the industrial renaissance requiring massive financing, with Apollo actively financing energy projects as part of the AI and data center buildout.
ROBOTICS— Robotics represents a whole new wave of opportunity beyond chips and data centers, with the Waymo problem solved opening up construction equipment and other robotics applications that should not all be financed with equity.
INFRA— Infrastructure financing is a fundamental good Apollo provides, serving as the largest source of financing for the global industrial renaissance with massive capital needs across multiple sectors.
DEFENSE— Defense is an area requiring massive capital deployment where Apollo is spending significant time, representing part of the broader industrial renaissance requiring specialized knowledge and financing.
INVGRADECREDIT— Investment grade private credit represents the best risk-reward asset class living between traditional buckets, with poor capital formation creating excess return opportunities as it lacks a dedicated institutional bucket.

Bearish

SAAS— Enterprise software faces a SaaS apocalypse as AI disrupts the sector, with 30% of private equity devoted to enterprise software expected to produce disastrous returns due to prices that didn't account for AI competition and reduced exit prospects.
PE— Private equity funds with heavy enterprise software exposure face disastrous returns due to overexposure to a sector being disrupted by AI, with prices paid reflecting a pre-AI future that no longer exists.

Not investment advice.

Mentioned

Market views