AI is reshaping the software landscape at unprecedented speed, making it easier and cheaper to replicate capabilities that once served as meaningful competitive advantages. For investors, operators, and technology leaders, the key question is no longer whether a company is adopting AI, but whether the value it has created can withstand increasingly capable competitors and foundation models.
In this whitepaper, Dejan Pokrajac, Global Head of Private Equity Partnerships at HTEC, introduces a practical framework for assessing the defensibility of AI-enabled products and software businesses. Drawing on private equity research, market data, and real-world diligence experience, the paper explores why AI maturity has rapidly lost value as a standalone differentiator and how buyers are increasingly rewarding measurable outcomes such as revenue growth, margin expansion, and operational leverage.
The paper examines the three primary ways AI creates enterprise value:
- AI-native engineering and delivery, which accelerates software development and improves quality
- Margin improvement through operating efficiency, enabling companies to scale without proportional increases in cost
- AI-powered revenue products, which create new monetizable sources of customer value
At the heart of the paper is a four-category AI Defensibility Framework that helps determine whether a company’s capabilities fall into commodity surface, data-dependent value, workflow-embedded or domain-tuned value.
By applying this framework, investors and portfolio company leaders can distinguish between capabilities that are vulnerable to commoditization and those with the potential to drive sustainable valuation premiums. The result is a practical approach to evaluating technology assets, strengthening diligence processes, and preparing businesses for more successful exits in an increasingly AI-driven market.
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