US software and private capital shares have been hit with a fresh wave of selling as investors seek shelter from the AI rout.

What's Happening

**Software stocks**: Sharp decline in valuations
- **Private capital**: Also affected by rotation
- **Destination**: Asset-heavy industries

## Why This Matters

Market Signals

**AI hype cooling**: Investors questioning valuations
2. **Profit taking**: Locking in gains from AI rally
3. **Rotation**: Moving to "safer" investments

### For Startups

- May face more scrutiny in fundraising
- Need clearer path to profitability
- AI differentiation alone may not be enough

### For Enterprise Software

- Companies without clear AI strategy face pressure
- Legacy software valuations under review
- Margin pressure from AI competition

## Outlook

This correction could be healthy long-term, weeding out companies without sustainable business models.