Fitch Ratings warned on Tuesday that North American software vendors face mounting disruption from generative artificial intelligence, saying the technology could compress profit margins and reshape long-standing subscription models even as it opens new revenue lines. Companies that quickly integrate differentiated AI features may gain pricing power, the agency said, but slower movers risk customer churn and eventual rating pressure. The caution lands at a moment of growing unease over the sector’s ability to turn heavy AI outlays into profits. A Massachusetts Institute of Technology survey of executives found that 95 percent of corporate generative-AI pilots fail to reach production or deliver meaningful returns. Equity markets are already punishing perceived laggards: Salesforce, Adobe and ServiceNow have fallen at least 17 percent each this year, erasing roughly US$160 billion in combined market value, Bloomberg data show. Industry leaders and investors have echoed the concerns. OpenAI chief executive Sam Altman has likened current capital spending on data centres to a telecom-style build-out that could leave some backers “burned,” while short-seller Jim Chanos compared today’s fervour to the late-1990s dot-com and networking boom. PBS estimates that AI infrastructure investment is large enough to account for nearly half of projected U.S. GDP growth in 2025, magnifying the macroeconomic stakes. Fitch expects software companies to continue allocating sizeable budgets to embed AI across product suites, but it emphasised that those unable to demonstrate clear productivity gains or monetise new features face heightened competitive and financial risks. The agency said credit outcomes will hinge on how quickly firms adjust their cost structures and go-to-market strategies as generative AI matures.