Berkshire Bets on Bending Spoons as AI Hits Software

Berkshire Hathaway has invested more than $900 million in Bending Spoons, an Italian holding company that buys software businesses the artificial intelligence boom has left for dead. The latest investment was a $330 million stake disclosed Wednesday. Bending Spoons called Berkshire a "longstanding inspiration" for its strategy, and its shares jumped 41% on the news, though some gains later receded. Its market capitalization sits around $30 billion.

It’s a striking endorsement for a firm that, at its Nasdaq debut in July, was a little-known owner of older internet brands: AOL, Vimeo, Eventbrite and Evernote.

A Buyer With Discipline

Friends Luca Ferrari, now the company’s CEO, Matteo Danieli and Francesco Patarnello founded the Milan-based company in 2013. Their mobile app Evertale flopped. With $40,000 left, they chose to build an operating company instead of making "products nobody wanted," according to the IPO prospectus. That’s a market lesson delivered the old-fashioned way: customers decide.

The approach has paid off. 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. Those figures came before the Airtable closing and the Miro announcement. The IPO itself, on June 30, raised about $1.7 billion at $29 a share. The stock closed Friday at $47.07.

The company says it hasn’t been outbid for a target in "several years." Its latest deals help explain why. In August, it announced the Airtable purchase for about $1.3 billion, nearly 90% below the workflow software provider’s late-2021 peak valuation. Last month, it agreed to buy collaboration software vendor Miro, once valued at $17.5 billion, for $1.36 billion.

The Price of Overvaluation

The industry calls the cause the "SaaSpocalypse." AI agents powered by large language models are putting pressure on software-as-a-service businesses. Shares of Intuit, HubSpot and Adobe were each down at least 30% that year. Private SaaS companies that once drew easy venture money are struggling to raise capital, while public markets show little appetite for IPOs. Meanwhile, Anthropic and OpenAI are moving toward trillion-dollar valuations.

Ferrari spoke plainly about the earlier boom. "Most enterprise SaaS businesses were valued at irrationally high levels until somewhat recently," he said. "We never saw those prices making any sense."

Traditional buyers are stuck. Former Gainsight CEO Nick Mehta said private equity firms face limits because "they got their nose bloodied." He added, "They paid much higher prices and have so many troubled companies that it's difficult for them to take swings now." Thoma Bravo and Vista Equity Partners didn’t respond to interview requests. Mehta said "Bending Spooned" has become a Silicon Valley verb for companies bought for pennies on the dollar. "Unfortunately, a lot of my friends in that game are stuck," he said. "Investors want out but there are no buyers. Anything pre-ChatGPT is legacy now."

Venture investor Ethan Kurzweil, founder and managing partner at Chemistry VC, put it bluntly: "You're either like a hot thing or you're nothing."

Hands-On Changes, Real Costs

Unlike private equity firms that buy, trim costs and sell, Bending Spoons says it aims to make profits from the businesses it acquires rather than pursue an eventual exit. It makes hands-on changes to software, operations and personnel. Mizuho analyst Lloyd Walmsley said, "It's not typical of traditional private equity firms to make anywhere near this level of change."

Those changes carry costs. On Monday, the company said a "large portion of the pre-acquisition team" at Airtable would leave with "substantial separation packages." It has also implemented layoffs at Evernote, Vimeo, WeTransfer and other portfolio companies. And it raises prices. In April 2023, months after buying Evernote, the company raised the annual personal subscription from $70 to $130. Walmsley said he considered switching to OneNote but stayed because the product provided value and switching costs were high.

Ferrari told CNBC that the "overwhelming majority" of portfolio profits go toward future growth, mostly through further acquisitions.

The Big Tech Spending Question

A separate Fortune report showed the scale of AI spending. Amazon, Alphabet, Microsoft and Meta were projected to spend more than $720 billion in capital expenditures that year, most of it on AI infrastructure, according to analyst estimates compiled by Bloomberg. Alphabet expects $195 billion to $205 billion, more than twice the $91.4 billion it spent in 2025. Alphabet President and Chief Investment Officer Ruth Porat said spending will be "significantly more" in 2027.

Financing is shifting toward debt. Private credit funds including Blue Owl, Apollo and KKR are increasingly funding AI development, with outstanding private loans to AI-related companies above $200 billion by some estimates. Alphabet reported negative free cash flow in the second quarter for the first time since its 2004 IPO. Its long-term debt stood at about $98 billion at the end of June, more than four times the year-earlier amount.

Chris Wood, Jefferies' global head of equity strategy, called massive U.S. capital destruction the most likely long-term outcome. He argued that 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 pushed back. "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," she said. Drawing on her experience advising then Treasury Secretary Hank Paulson in 2008, she said: "You should identify your greatest source of vulnerability early and fortify against it, because you can't address it in the moment."

Why This Matters:

Two very different capital strategies are playing out at once. Bending Spoons buys cheaply, runs businesses for cash and grows through acquisitions funded by profits. The hyperscalers spend hundreds of billions, increasingly on borrowed money, betting returns will arrive. Both strategies depend on price discipline, and the sector’s wreckage shows what happens when valuations detach from fundamentals: Airtable down nearly 90%, Miro bought for a fraction of its peak. For investors and policymakers, the lesson is that markets eventually reprice excess, and rising private credit exposure to AI means the next correction could reach beyond tech into lenders and their backers. Whether Porat’s confidence or Wood’s warning proves right will be settled by returns, not rhetoric.