Silicon Valley’s new buyout playbook is hitting Wall Street

Venture capital is buying its way into the artificial intelligence transformation that enterprise software hasn't delivered. Instead of selling AI tools to companies, venture firms are buying legacy companies outright and rebuilding them around AI from the inside. The bet puts VCs on offense and leaves traditional private equity, which spent the last cycle buying enterprise software at peak prices, on defense. In Silicon Valley, the strategy is known as the AI rollup. Over the past six months it's crossed into public markets twice: General Catalyst and Trian's $7.6 billion take-private of Janus Henderson (JHG) in December, and Long Lake Management's $6.3 billion agreement in May to take American Express Global Business Travel (GBTG) private at a 65% premium. General Catalyst managing director Madhu Namburi calls it "service as software." It's a take on software-as-a-service, or SaaS, which made software companies highly profitable because growth didn't require growing costs. AI rollups apply the same logic to services businesses. Venture firms have been running the playbook since 2023, mostly inside the private market. General Catalyst — which backs Long Lake alongside Alpha Wave – has co-created roughly a dozen of these rollup vehicles. Joshua Kushner's Thrive Capital runs Thrive Holdings with the same model and more than $1 billion in capital. It's put that money to work, recently backing an AI rollup of regional accounting firms. …