Bain & Company is reportedly using AI-generated replicas of software products to help private equity investors evaluate acquisition targets, according to FT.
The approach, described as “vibecoding,” uses prompts and generative AI to rapidly create code and mock-ups that replicate parts of a target company’s software.
The replicas help potential buyers assess how difficult it would be to recreate a software product and whether the company has a defensible competitive advantage.
Bain has reportedly created hundreds of rough prototypes as part of its AI diligence work. The effort began in 2023 with a dedicated team of software engineers and has since become a broader tool used by consultants.
The strategy comes as generative AI lowers the cost of building software and raises new questions about the durability of software business models.
Private equity investors have become more cautious about software deals as AI changes how products are built, evaluated, and potentially replaced.
Public market investors have also priced in concerns about AI disruption, with leading enterprise software companies facing sharp valuation pressure this year.
The broader uncertainty has weighed on private markets as well. The value of private equity-led technology, telecom, and media transactions reportedly fell 69% in the first quarter of 2026 compared with the fourth quarter of 2025, according to KPMG data cited by the FT.
For investors, the Bain approach is designed to show where a software company’s value truly sits — whether in the code itself, product workflow, customer relationships, data, distribution, or another part of the business.
The use of AI-generated prototypes also gives buyers a way to imagine how a software product could evolve over several years as AI continues reshaping enterprise technology.
The trend highlights how AI is changing due diligence in private equity, especially in software, where firms are increasingly testing not only current product capabilities but also whether a target’s technology can remain valuable in a faster and more automated development environment.
