Private equity firm Silver Lake is in preliminary talks to take Workday private, according to a Reuters exclusive Thursday that sent shares of the enterprise-software company up as much as 25 percent and briefly tripped an exchange volatility halt.

The Pleasanton, California, provider of cloud human-resources and financial-management software closed with a market capitalization near $51 billion, up from roughly $43 billion before the report. A completed deal would rank among the largest software leveraged buyouts on record, testing private equity's appetite for a category of business that public investors have marked down on artificial-intelligence disruption fears.

The setup

Workday had entered Thursday down about 15 percent for the year and more than 40 percent off its 2024 peak, Reuters reported, as investors questioned "the durability of traditional software in an era of rapidly advancing artificial intelligence." Founder Aneel Bhusri returned as chief executive in February to lead an AI overhaul of the product line. Workday, founded in 2005, serves more than 11,500 customers and reported $9.6 billion in fiscal 2025 revenue.

Silver Lake's playbook

Silver Lake is expected to invite additional investors into the deal, a structure it used last year on the $55 billion take-private of Electronic Arts, CNBC reported. The firm has previously taken Dell Technologies and VMware private. Analysts told CNBC that a Workday deal at the current price "would rank among the largest software LBOs ever attempted."

Prior software buyouts this cycle have been much smaller: financial-planning software company OneStream went private at $6.4 billion, and payroll company Dayforce at $12.3 billion.

The catch

The talks are preliminary. Reuters described them as ongoing with "no guarantee of a deal." The same AI overhang that pushed Workday shares more than 40 percent off their 2024 peak — and made the company cheap enough to attract a buyout approach — is also the argument against the LBO thesis. Leveraged buyouts pay off when lenders can bank on steady cash flow, and the durability of Workday's core human-resources and finance franchise against AI-native competitors is the exact question public markets have not resolved. None of the three reports carried on-the-record comment from Silver Lake or Workday.

Yahoo Finance called a completed acquisition "a major revival for large-scale technology buyouts after years of sluggish dealmaking in the sector."