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Bain Capital and other private equity groups are using AI to rapidly recreate software products before acquiring them, a due-diligence technique aimed at stress-testing the competitive moats of potential takeover targets.
The practice — known as vibecoding, in which AI generates functional code from plain-language prompts — allows deal teams to probe how quickly a target's core product can be replicated, and by extension, how defensible its market position actually is.
A New Diligence Lever for Software Buyouts The premise is straightforward: if a deal team can vibe-code a working facsimile of a software product in days, so can a well-funded competitor.
Private equity buyers have long paid premium multiples for software businesses on the assumption that switching costs, network effects, or proprietary data create durable moats.
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