Global investment firm Permira is seeking to acquire discounted software loans, as the sector is concerned that artificial intelligence will erode the software industry.

"The market has overreacted," Premira's credit head of strategic opportunities, Ian Jackson, told Bloomberg. 

The firm is understood to be focusing on broadly syndicated loans in the European secondary markets.

Permira is also considering expanding into the U.S. and is looking for software companies that have robust offerings and high market visibility, sources told the publication. 

Permira is a global investment firm with approximately $98 billion in assets under management. The firm is headquartered in London, but operates globally and focuses on buyout, growth equity, and credit strategies. 

Software-as-a-service (SaaS) and data provider stocks have recently seen sharp declines amid market concerns that artificial intelligence will erode the sector’s relevance.

Jackson told Bloomberg that vulnerabilities still exist in the credit markets, especially as the war in Iran continues.

"I wouldn't say it's a full-blown crisis, at least not at this stage," he added.

Some of the top private equity CEOs have addressed what many call the “SaaS apocalypse” as investors voice concerns about the stock slump.

Thoma Bravo’s managing partner Holden Spaht, believes AI is driving the next phase of innovation in software and sees this as a “compelling opportunity". 

Meanwhile, Apollo Global Management’s CEO Marc Rowan has called the investor reaction to software stocks “extreme.”

JPMorgan Chase & Co ( JPM ) started restricting lending to loans associated with software companies in its private credit funds.