AI to replace half of Mistral AI’s software? Here’s what CEO Arthur Mensch said as tech stocks face headwinds
The key ETF question here is not whether AI is exciting, but which parts of the software stack are actually exposed to disruption. Funds that screen broadly for โtechโ or โsoftwareโ can still be heavily tilted toward enterprise applications, workflow tools and SaaS platforms whose pricing power depends on switching costs and recurring subscriptions. If AI changes how those functions are delivered, the pressure can show up first in valuations, then in fundamentals.
That makes concentration more important than the headline category. An ETF with a handful of dominant large-cap holdings can behave very differently from a more diversified information technology fund. Investors should look at whether the portfolio is concentrated in software names, whether it also owns infrastructure, semiconductors or platform companies, and how much of the fundโs risk comes from a single business model rather than the sector as a whole.
This is also a reminder that โsoftwareโ is not one trade. System-of-record platforms, core databases and infrastructure layers may be more resilient than workflow applications that sit on top of them. For long-term allocators, the relevant test is whether the ETFโs index methodology meaningfully separates durable infrastructure from potentially vulnerable application-layer exposure, or simply bundles them together under a broad theme.
For portfolio construction, the practical takeaway is to avoid treating thematic tech exposure as a substitute for a core allocation. If an ETF is used as a satellite position, it should be weighed against the rest of the portfolioโs existing tech tilt, because the same AI narrative can create hidden overlap across large-cap growth, software and innovation funds. Rebalancing discipline matters when a theme becomes crowded.
Arthur Mensch, Chief Executive Officer of Mistral AI, on Wednesday said that more than half of the company’s current software is likely to be replaced by artificial intelligence (AI), CNBC reported.
Addressing investor concerns over software stocks, Mensch said, "AI is making us able to develop software at the speed of light." He made these remarks at the India Accelerates event on the sidelines of the ongoing AI Impact Summit 2026, which New Delhi is hosting from 16 to 20 February.
Mensch’s remarks came after leading software stocks witnessed a sharp sell-off. The downturn was partly attributed to the launch of Cowork by Anthropic, as investors grew increasingly concerned that advanced AI tools could replace functions handled by traditional enterprise software. The investors have also been flagging concerns that AI could eat into software-as-a-service (SaaS) business models. The iShares Expanded Tech-Software Sector ETF, which includes major holdings such as Microsoft and Salesforce, has declined by more than 20% this year. In India, leading IT firms, including Tata Consultancy Services and Infosys, have also seen their shares slide.
"I would say more than half of whatโs currently being bought by IT in terms of SaaS is going to shift to AI," he said, and added that as long as companies have the "right infrastructure in place", they can use AI to manage specific business functions by connecting their data to AI systems to create applications.
โReplatformingโ is a big opportunity, says Mensch
He said that businesses are now looking to use more artificial intelligence as compared to current SaaS, which clearly indicates that there is a "replatforming" taking place.
Calling it a "big opportunity", Mistral AI CEO said that now they are getting more than 100 enterprise customers, who are approaching them with plans to modernise their information technology systems. He further said that many of these businesses are also looking to replace older tools, which were purchased 20 years ago, and that they have become costly to maintain.
Enterprise customers view AI as a method to replatform the thing so it could become more efficient and less pricey, he added.
Mensch’s views were echoed by Bipul Sinha, CEO of Rubrik, who said that "workflow software" is likely to be "significantly disrupted by AI".
Providing slight relief, Mistral AI CEO said software built around core record-keeping systems is unlikely to be disrupted, and added that these platforms manage a company’s essential data, while typically operating alongside AI tools, rather than being replaced by them. Adding further, Sinha noted that the system of record or data infrastructure software that is enabling AI โwill be a positiveโ.
Mistral plans India expansion
As global tech giants are announcing expansion plans in India, Mistral CEO said the company plans to open its first office this year. The artificial intelligence company is currently working with firms with a presence in India, but is now exploring potential customers who are based in the country across the public and private sectors.
In terms of its approach to India, Mistral AI CEO said that while they are building data centres in Europe, in India, the approach would be different, where the firm is planning to tie up with companies that already have a physical infrastructural presence in India.
Enjoyed this article? Sign up for our newsletter to receive regular insights and stay connected.