SaaS and seat-based software face structural decline
The bear case for traditional SaaS and seat-based software models is that AI-native tools and agents will commoditize and disrupt their core business models.
The argument
The speaker reiterated his stance of actively avoiding SaaS companies, arguing that trying to pick bottoms in these stocks ignores the permanent structural shift. He argued that public software enterprises will struggle to adapt as AI agents reduce the need for human seats.
The thesis, stress-tested
✓ What validates it
- ✓Continued multiple compression and downward growth revisions in legacy SaaS earnings reports
- ✓Rapid adoption of AI-native agentic platforms displacing traditional software seats
▸ Risks discussed
- ▸SaaS providers successfully integrating proprietary AI features that justify price increases
- ▸A temporary cyclical rebound in enterprise software spending
Hear it yourself
"And what it means for public companies and private companies and any company that exists, you don't know if your business will be disrupted by AI, but the probability of that happening rises every day that we get closer to AGI."
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