Bending Spoons Buys Software Cast-Offs as AI Bets Soar

Bending Spoons has drawn more than $900 million in investment from Berkshire Hathaway as it buys software companies that lost value in the artificial intelligence boom. It’s already telling workers at one of them that a “large portion of the pre-acquisition team” will be leaving.

The Italian holding company said Berkshire, which invested another $330 million in a stake disclosed Wednesday, had been a “longstanding inspiration” for its strategy. Shares rose 41% after the announcement, though some gains later receded. The company’s market capitalization stood at about $30 billion.

Who Pays for the Bargain

In August, Bending Spoons announced it would buy workflow software provider Airtable for about $1.3 billion, nearly 90% below Airtable’s late-2021 peak valuation. On Monday, the company said many Airtable staff who joined before the acquisition would leave with “substantial separation packages.” Layoffs have also hit Evernote, Vimeo, WeTransfer and other portfolio companies. Last month, Bending Spoons agreed to buy collaboration software vendor Miro, once valued at $17.5 billion, for $1.36 billion.

Customers have felt the model, too. In April 2023, months after buying Evernote, Bending Spoons raised the annual personal subscription price from $70 to $130. Later, it charged $100 for a starter plan and $250 for Evernote Advanced, compared with $170 for the old pro plan. Mizuho analyst Lloyd Walmsley said his first reaction was, “Oh man, I guess I have to switch to OneNote.” He stayed because the product provided value and switching costs were high. That’s the point. Switching costs make price increases stick.

CEO Luca Ferrari told CNBC that the “overwhelming majority” of profits from portfolio companies goes toward future growth, mostly further acquisitions. In its first earnings report as a public company in August, Bending Spoons reported revenue of more than $700 million, more than double a year earlier, with growth driven almost entirely by acquisitions. Net income rose 171% to $177 million.

A Stuck Industry

The deals follow what’s been dubbed the “SaaSpocalypse,” as AI agents powered by large language models squeeze software-as-a-service businesses. Shares of Intuit, HubSpot and Adobe were each down at least 30% this year. Private SaaS firms that once drew venture capital are struggling to raise money, and public markets show little appetite for IPOs. Anthropic and OpenAI, meanwhile, are moving toward trillion-dollar valuations.

“You’re either like a hot thing or you’re nothing,” said Ethan Kurzweil of Chemistry VC. Former Gainsight CEO Nick Mehta said private equity firms are hamstrung because “they got their nose bloodied.” He added: “Unfortunately, a lot of my friends in that game are stuck. Investors want out but there are no buyers. Anything pre-ChatGPT is legacy now.” Mehta said “Bending Spooned” has become a Silicon Valley verb for companies acquired for pennies on the dollar. Thoma Bravo and Vista Equity Partners didn’t respond to interview requests, and Bending Spoons said it hasn’t been outbid for a target in “several years.”

Unlike private equity firms that cut costs and then sell or go public, Bending Spoons says it aims to generate profits from acquired businesses rather than pursue an exit. Walmsley said: “It’s not typical of traditional private equity firms to make anywhere near this level of change.”

The Spending Spree Behind It All

A separate Fortune report laid out the scale of the AI buildout. Amazon, Alphabet, Microsoft and Meta are projected to spend more than $720 billion in capital expenditures this year, mostly on AI infrastructure, according to analyst estimates compiled by Bloomberg. Alphabet expects $195 billion to $205 billion in capital spending this year, more than twice the $91.4 billion it spent in 2025. Alphabet President and Chief Investment Officer Ruth Porat said it intends to spend “significantly more” in 2027.

Private credit funds including Blue Owl, Apollo and KKR are increasingly financing the race. By some estimates, outstanding private loans to AI-related companies have climbed above $200 billion, often through special purpose vehicles and smaller “neocloud” operators. Alphabet reported negative free cash flow in the second quarter for the first time since its 2004 IPO. At the end of June, its long-term debt stood at about $98 billion, more than four times the year-earlier figure.

Jefferies’ global head of equity strategy, Chris Wood, called massive U.S. capital destruction the most likely long-term outcome. He argued cheaper Chinese open-source models could commoditize large language models and undermine U.S. AI economics, saying China “has become a technological peer to the U.S. in AI.” Moonshot AI told Fortune that 70% of its usage comes from outside China. Porat rejected the argument: “It’s illogical to say we’re in a capacity-constrained position because there’s such strong demand for the insight in the ability to improve business and government, and yet you can’t drive a return on it.”

Porat, who advised then-Treasury Secretary Hank Paulson during the 2008 financial crisis, said one lesson from that period was to “identify your greatest source of vulnerability early and fortify against it, because you can’t address it in the moment.”

Why This Matters: The AI boom is sorting the software economy into winners and leftovers, and the people in the leftovers pay first. Airtable’s departing staff, Evernote subscribers facing steeper prices and employees at other portfolio companies absorb the cost of a model built on buying distressed assets cheaply and reworking them hard. Meanwhile, more than $200 billion in private lending to AI-related firms, much of it routed through special purpose vehicles, and Alphabet’s debt jump point to leverage building outside traditional bank oversight. Porat’s own crisis-era lesson about hidden vulnerability cuts both ways. If Wood is right and capital destruction follows, the losses won’t stay with the investors who made the bets. Workers, pensions and lenders tied to this financing could carry them. Nobody here is accountable to the public for how that risk is spread.