AI Isn't Replacing Software, It's Supercharging It, Says Morgan Stanley
Published on March 25, 2026.
Morgan Stanley and AI-powered market intelligence and research platform AlphaSense held a webinar to discuss misconceptions about AI versus software. Equity analyst Keith Weiss, an equity analyst at Morgan Stanley, stated that the idea that AI will replace software is a "definitional error". However, he noted that generative AI, specifically diffusion engines, is impacting certain areas of the software industry, such as Adobe's photography business. Weiss suggested that the long-term opportunity for generative software could add $400 billion to the broader Enterprise Software by 2028. There has been a 33% decline in software multiples since October 2025 due to several factors including post-COVID spending overhang, tighter IT budgets due to macroeconomic concerns, and the emergence of competitive AI technologies.
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