Morgan Stanley's top tech banker: It's 'wartime, not peacetime' for software
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AI is delivering a reality check to Wall Street — and it’s clear from the vibe shift at the Morgan Stanley Tech, Media and Telecom conference.
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In this article MS Follow your favorite stocks CREATE FREE ACCOUNT This year's Morgan Stanley Tech, Media and Telecom conference lineup was stacked: Dario Amodei and Sam Altman (both in the middle of the Pentagon drama ) Jensen Huang, Satya Nadella, and dozens of enterprise software CEOs trying to convince investors they'll survive the AI reckoning. I spent a day on the ground covering it, and then sat down with David Chen, Morgan Stanley's head of global technology investment banking, to unpack what he heard. Chen said the biggest change from last year was the nature of the questions. In 2025, companies were talking about using artificial intelligence to trim expenses, like shaving a few points off operating costs with copilots and automation tools. Chen said that's now table stakes. "I don't think investors really wanted to hear about how people are being more efficient with AI," he told us. "They really, really wanted to hear, are you a beneficiary, or does AI threaten your overall business?" And to their credit, companies were more direct about answering that question this year. Particularly the enterprise software companies , which have watched a trillion dollars in market cap evaporate in just a week this year. Chen drew a line between companies whose software does something deterministic, like calculating payroll, sending invoices, things where being wrong by 2% is a real problem, and companies that are essentially organizing public data and putting it behind a nice interface. The former, he argued, still has a moat. The latter is in serious trouble. "AI doesn't kill software," Chen said. "It's reshuffling it." watch now VIDEO 4:07 04:07 AI can eliminate a huge percentage of knowledge work, says Oaktree's Howard Marks Money Movers But he didn't sugarcoat it either. For the companies on the wrong side of that line, he called it "wartime, not peacetime." And he made an interesting observation about leadership: in this environment, boards are starting to prefer ...
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