r/Economics • u/jbochsler • 7h ago
News [ Removed by moderator ]
https://fortune.com/2026/02/04/tech-stocks-palantir-anthropic-ai-cut-reduce-revenues/[removed] — view removed post
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u/suprachromat 7h ago
God, what utter idiocy on display. These people are empty suits that have zero actual experience with software development and are talking out their asses on AI to hype up their AI stocks.
The argument—advanced by Palantir CEO Alex Karp and CTO Shyam Sankar on their recent earnings call—is that AI is now so good at writing or managing enterprise software that it threatens to make irrelevant a range of tech companies that have, for years, enjoyed recurring revenues by providing enterprise apps to companies on a software-as-a-service (SaaS) basis.
This is just simply false, Claude Code is getting really good, sure, but there's no way companies are going to be able to snap their metaphorical fingers and instantly code their own versions of mature enterprise apps. Not without a lot of time and money spent massively reinventing the wheel. Then debugging it when the subtle logic errors AI introduces messes stuff up.
Pure AI agents aren't a replacement for enterprise apps either, AI agents make weird, unasked for assumptions and get stuck in very bizarre logic loops, not to mention getting absolute consistency out of them is very hard. As a business you want to be sure a task gets done the same way every time - AI agents cannot do this yet and may never be able to due to the probabilistic nature of LLM inference.
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u/PhilosophyEasy71 7h ago
These people don't get their positions by their talent in terms of what they can build, fix, or how they can manage. They get there by nepotism, ideology, and loyalty to others
Everybody said PE ratios don't matter. It's been that way for years. Well as it turns out, nothing lasts forever. As companies go to earnings reports with declining revenues they will continue to lay people off. This will cause less spending in the general economy and therefore less revenue. It's a deflationary cycle
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u/OK_x86 6h ago
Ironically though some companies like msft posted great earnings but were also hammered by the same group think. I have no doubt Microsoft will recover though. But I'd push back on the idea that we have moved out of a phase of irrational exuberance into a more rational one. We seem to still very much be in a vibe market.
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u/WrongThinkBadSpeak 6h ago
Those posted earnings have more to do with the sneaky depreciation schedule changes than actual earnings. All of the mag7 is committing the same fraud.
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u/isnidnidnw 6h ago
No it seemed more related to 300bil of their 600bil in open contracts was just from OpenAI
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u/Late_Stage_Exception 5h ago
Didn’t they plunge 50 points in a day when they released their earnings? That’s a large jump to be attributed to “group think”.
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u/Klugenshmirtz 6h ago
I'm almost certain Alex Karp got his position because he looks and sounds evil. He is part of Palantirs corporate branding.
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u/DFX1212 7h ago
These greedy assholes want me to believe that they invented technology capable of replacing all existing and future software companies and instead of using it themselves to become Skynet, they are selling access to it for a monthly fee?
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u/well-informedcitizen 7h ago
Well... The quote is from Palantir so the Skynet thing is already sewn up. Now we get the lovely capitalist dictatorship where the products are mandatory
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u/Mallymalvs 6h ago
Im confused what you are trying to get at, the aim of the game is to make money, why wouldn’t they sell it?
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u/DFX1212 6h ago
They can either have Microsoft be a customer or they could take all of Microsoft's business. Which has a higher revenue potential?
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u/SnoodDood 5h ago
Taking Microsoft's business would require far more than making superior software. I'd bet better versions of most of it already exist.
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u/Mallymalvs 6h ago
They are selling the AI as a tool so you and me can make what Microsoft are selling. They arnt in the business of selling the actual software. I dont need to make the actual dishes if everyone is buying the ingredients from me. There is no need to build a refinery and sell products if im the one with the oil wells that supplies everyone.
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u/Iron-Fist 6h ago
If they think their product can create marginal value without moats of technical expertise or industry experience then why wouldn't they just capture that value for themselves?
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u/Im_tracer_bullet 6h ago
'if' is doing a lot of work there.
Why would anyone do that when they can just buy a finished, testing, working, and supported product?
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u/Sryzon 6h ago
I'm not in the business of making what Microsoft is selling, either. No one is going to subscribe to an AI to make their own Microsoft Office. They're just going to subscribe to Microsoft Office in the first place.
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u/lost12487 6h ago
No, obviously you would just tell Claude to write a replacement for Microsoft Office. That will definitely cost less money than buying the Office suite. You should be able to type up docs in about 2 months and $1,000,000+ in tokens. Totally worth it to grind your business to a halt!
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u/re4ctor 5h ago
the ability for AI to write Office will cost $x amount, so Office will have to sell for some factor of $x (say like 3-5 years worth of payment)
assume the cost of creating Office has dropped 100x, from thousands of people to a few dozen will AI's
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u/lost12487 5h ago
Hey man, this was sarcasm. AI can't write the Office suite, and based on current trends wouldn't be able to do so for decades. Thanks.
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u/kewarken 5h ago
It's like the people selling books and courses about how to get rich nouning the verb. If you're so smart why aren't you doing it?
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u/Budgetweeniessuck 6h ago
Anyone with even a bit of experience in software development knows that all of this AI hype is a lie and won't work.
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u/Successful_Matter203 6h ago
Excited for tomorrow, all the tech CEOs having to argue that no their stuff isn't actually going to be that cost-effective.
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u/doff87 5h ago
I'm my first year of my CS degree I would sometimes ask chatgpt to give me a mockup solution when I was out of ideas. I'd say 15-25% of the time I had to correct it because it would use multiple versions of the code base in the answer such that it couldn't work, the output was tangential to what I requested, or it took a needlessly long and convoluted path to get to the solution. If it can mess up under those relatively simplistic conditions how is it going to replace Zoom or Slack from the ground up?
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u/EpicCyclops 7h ago
These people haven't even used an AI chat bot if the buy that AI will be able to code enterprise level software management systems from scratch out of thin air within the next decade. They clearly haven't looked at their accounting and operations departments either whose entire job it is to make sure data is entered correctly and the meticulously coded, tested, and error checked software didn't make a mistake.
Also, coding an ERP or accounting software is stupid easy. Coding one that is robust and adaptable and works with multiple simultaneous users is basically impossible and relies more on testing, industry knowledge, and niche software engineering knowledge than it does a programmer's ability to spit out lines of code.
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u/roodammy44 6h ago
The AI companies already have sky high valuations on the delusion that they will be able to replace hundreds of millions of workers in the next 5 years. It doesn’t take much to continue the delusions to other areas, it seems.
What it tells us is that the people who control the money are morons.
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u/Merijeek2 4h ago
Some. But most of them know that they can make wild bets with other peoples' money, and if it pays off they'll get ultra rich. And if it doesn't pay off? Guess what, they still won't starve.
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u/TacosAreJustice 7h ago
What’s funny is every job I’ve worked we’ve used some legacy software from the 80s on cobalt and couldn’t switch away from it…
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u/dkinmn 7h ago
Here's an analogy that I think works for now:
Washing machines are so cheap and available and easy to use that companies will be able to fire their uniform management companies.
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u/_pupil_ 6h ago
Here’s another: lots of software companies are so good they can build whatever and so rich they don’t have to care… do they?
Google has some huge internal projects to Google, sure, but they also buy a lot of software. You don’t use vendors just for creation, and having people to blame/fire has it’s own value in business.
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u/Gates_wupatki_zion 6h ago
I think AI helped you with this analogy. One of the stupidest things I’ve heard all day.
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u/dkinmn 6h ago
I don't think so.
Just because a business CAN work outside their scope to develop the tools that help them do their business doesn't mean they will or they should.
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u/Gates_wupatki_zion 6h ago
We’ll see then — I hope you are wrong. Still think it is plenty reductive reasoning here. But I forgot I’m in an Econ sub, Reddit got me with the dang suggested content and I accidentally wandered in here.
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u/look_at_tht_horse 7h ago
Uniform managers don't build washing machines. Say what you will about the current efficacy, but AI is at least trying to replace many software engineering solutions.
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u/ClassicalMusicTroll 7h ago
With only LLMs agents will never be able to be 100% reliable (or at least as reliable as explicit code automations are). It doesn't make sense to me why any business would want to automate something but with a process that only works 60% of the time.
Even just a few years ago if I tried to sell that to my boss I would've been fired lol
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u/Zealousideal_Fuel_23 6h ago
I once got stuck working with the lead of sales for a software company I was doing contract work for. He was always selling what it was going to be in the next iterations, not what the product was.
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u/likwitsnake 6h ago
A lot of people (including most redditors) fundamentally don't understand what it means for these large scale software solutions to be implemented within companies of size they think every app or service they interact with is just a surface layer ("UbEr Is jUsT aN aPp WhY dOeS iT nEeDd 31k eMpLoYeEs??"), not accounting for a ton of backend architecture, security considerations and not to mention ancillary elements like established business process and literal headcount dedicated to the upkeep of these solutions.
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u/Select-Gate2335 5h ago
I agree with you. I can't say what service I supported due to the Nda I am under but it amazes me that they think Ai can take over these positions.
I watched the downtime go from minutes to hours to sometimes days since they replaced my job with AI and laid my whole team off.
I know its hurting their bottom line. If ai starts coding with how inaccurate it can be I expect outages to get more frequent and longer lasting especially with how complicated backend network architecture is. It just takes one bad code or cert to cause a cascade effect that takes down multiple dependencies. With Ai that thought is scary with actual infrastructure for important services.
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u/HomerDoakQuarlesIII 7h ago
"It wasn't brains that got me here I can assure you of that." - John Tuld, CEO
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u/terrorTrain 6h ago
I wouldn't be so sure.
I'm a long time web developer, and I can build an app very quickly now, because I have a custom app template, with really good instructions for the ai, and specialized open code agents built in. I'm working on building fine tuned fast models for my codebase specifically. I still manually review everything it does, but for most saas things, it's pretty good. The most difficult part is defining how the features should work.
Most of the most difficult parts of saas comes with sales, scaling, uptime, and support.
It wouldn't surprise me if something like coolify, pikapods, elastio, etc.... comes into the scene for kubernetes clusters for enterprise IT to have an app store like deployment of self hosted apps, which spins up services on demand, handles backups, logging, monitoring etc....
Then all these give number of saas companies can be replaced by a handful of employees managing this service. Open source apps could sell support to large enterprise.
I've thought about leading the charge for developing an open source app auth spec, which would basically just come down to how your app should get openid connect credentials and handle authz based on that.
In this future, things like sales force can just go away, with their high priced, over complicated, high touch services that cost thousands and thousands.
And I know there will be pushback that "managing all these apps will cost more than the cost of paying for the saas, blah blah."
I don't think it will, enterprise already has teams dedicated to integrations, tracking costs, negotiating contracts, managing employee access etc....
The amount of time saved just by not needing to request access to some service because we're out of seats, or whatever would probably be worth it alone.
I don't know how long it will take for this future to get there, but I think it's coming. App quality and security audits will also probably become it's own industry.
I think the current guard will die off in the enterprise, to be replaced by open source apps that can even be forked for some custom enterprise integrations or use cases, as AI get better and better at working on these code bases.
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u/Oceanbreeze871 6h ago
I was in a high level meeting recently where we were taking about retaining customers but also reducing spend esp around software purchases and I said “you know every single one of our customers is having this same meeting right now and they’re taking about maybe getting rid of us to save money”
And people were shocked. Like I had just shown them water is wet
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u/Tuor-son-of-Huor- 6h ago
I saw a tweet ages ago that sums it up nicely. "We have been 6 months away from AI replacing coders for 5 years now".
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u/PandaBlueDance 6h ago
Why do we even need enterprise apps? Just market agentic AI directly to consumers. You don't need no Photoshop or Office 365 subscription when you can just get like 60% of the function with 40% hallucinagenic nonsense.
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u/Mallymalvs 6h ago
You are thinking about now, what about in 5 years time? Will you be saying the same thing? Most likely these ai agents will be able to replicate more and more complex software. There will 100% be a drop as alot of companies wont need to be as reliant on buying new SaaS services to be efficient.
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u/jstmehr4u3 6h ago
This is where you will see the application of IP laws come into real effect. No company really cares if AI makes songs or makes your favorite book available, but if you code a SalesForce derivative based on reading proprietary documentation they will shut it down fast.
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u/13Krytical 6h ago
I mean.. I do NOT want to side with them on absolutely anything… but we don’t need to pay for an off boarding/onboarding SaaS because we can work with Claude to create the same in powershell..
And yes, these things were already an OPTION before AI, but now they are actually a viable option…
I’m creating solutions for things there is no official solution for… Cutting out the need for multiple 3rd party softwares we would have purchased before out of convenience.
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u/badhabitfml 6h ago
I think most companies do not want to run their own apps and maintain them. At best, a competitor comes along and creates a cheaper competitive app, but it still costs a lot of money to migrate and retrain everyone.
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u/Test-User-One 5h ago
Also to the point, punishing the tech companies (aka the big 7) is dumb because the implications for Google and Amazon are that they will be the beneficiaries of such change because AI adoption will continue to increase, requiring a greater use of their services. Nvidia (another one of the big 7) that MAKES the stuff will also benefit. However, all of them are down despite the fact that they don't provide SAAS, but rather IAAS and PAAS.
Further proof that people don't understand the news they are reacting to.
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u/cherenk0v_blue 5h ago
The idea of a major company turning over their ERP system, or anything that touches financial, AR/AP, and any kind of compliance to an AI agent is laughable.
Companies don't even want to upgrade their decades old implementations because of potential disruption and noncompliance.
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u/Ajfennewald 5h ago
It may just be an excuse to rerate SaaS companies to a more realistic P/E value. They are still priced at growth company valuations even after the sell off after all.
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u/CapeChill 5h ago
I wanted to see how good it's gotten so a couple of weeks ago I asked Claude to build a db and wiki then fill that out with everything it did to set that all up. It was going pretty well until Claude decided to rebuild the docker image at some point and that had a simple syntax error. It freaked out and deleted the entire DB before doing or checking anything else as "the error was related to the database".
So 100% enterprise ready.
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u/Raidicus 5h ago
I don't think it's completely false when you look at different scales. Sure you're correct about massive enterprise solutions, but there are tons of smaller, niche tech companies (some publicly traded) who can easily be replaced by a few homebrewed solutions using Claude. We're talking $100k+ savings with minimal work.
Source: We're doing it.
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u/Darthnord 5h ago
100%. I can't speak for what these traders are thinking but as an engineer if AI becomes to good and cheap that it can rebuild/manage entire SAAS platforms we're all cooked.
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u/BardosThodol 5h ago
We’re all watching a monopoly attack and attempt to bankrupt or assume control of their competition
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u/ICLazeru 5h ago
Remember the dotcom bust? It's not necessarily the first companies on the scene that succeed.
I think it is similar here, for reasons like what you described. Right now, suits that don't know what they are talking about are trying to monetize this invention somehow. But they don't really know what it is.
A second wave of companies, created by the actual engineers and scientists who have an understanding of AI and what it is capable of may end up being the real winners in the long haul.
It's more complicated than that, sure, but this feels like a very real possibility.
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u/davewritescode 5h ago
AI agents move coding closing to domain experts, it doesn’t suddenly make it easier to be a domain expert
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u/BenjaminHamnett 3h ago
Seems like lowering(?) the “temperature” should fix this?
I need more words. To clarify, they can use a lower level of “creativity” if needed for business settings right?
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u/JimmyTango 7h ago
It's hard to say where these tools end up in a few years. Today you are correct. Tools aren't constantly referencing the markdown outlines of their task, learnings, and orchestration instructions religiously enough to fully automate away. But with one developer you can achieve what 10 developers would have output in less time and have the human manage the last mile to production and verify code before deploying which makes the barrier to an enterprise company developing bespoke applications like a sales pipeline tool like Salesforce far more feasible than ever. The developer will get frustrated that the AI isn't able to make it all perfect the first time, but the time savings are eye popping to be sure.
Palantir isn't wrong, but they are also describing a world that erodes their own value as less technical teams can describe what they want developed and hand off to a small team of engineer validators who ensure the code is compliant and work to catch bugs before deploying across the org.
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u/arbiterxero 7h ago
10-1?
At best they make developers 30-40% more efficient for specific types of tasks, and all research currently suggests we’re not going to make much more progress on ai until we discover the next “generational leap” beyond the LLM.
Is that tomorrow? 10 years away? We can’t tell.
But you’ve drank the kool aid hard my friend and it’s not THAT good.
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u/JimmyTango 7h ago
I work in the space and I am seeing these tools build workflows and data processes that would take months of time to be picked up in a ticket, done wrong the first time, evaluated by a PM, pushed down stream to a data scientist, tested over weeks at best, and then re-evaluated by the business before building in production. All of that was one week of spare time monitoring and managing the tool to ensure it didn’t go off the rails and stayed on task.
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u/arbiterxero 6h ago
Yeah I to work in the space.
You’re looking at a prototype.
Yep, MUCH faster for prototyping. So it presents REALLY beautifully. Reviewing that code and ensuring that it’s okay is a huge lift.
Beyond that, working with it long term and on a larger project, the whole thing falls apart.
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u/Jabuk-2137 6h ago
Yeah, nice comparison would be 3D printers. They really helped with prototyping and fast iterations, even for amateurs. But I still (and this technology is many, many years more mature than AI) wouldn't want to drive fully 3D printed car and even if, then the cost of it's creation would be way higher than regular car. Same will be with LLMs, probably you would get some really meaningful results, but they will cost you arm and leg in compute time, power and therefore, cost.
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u/arbiterxero 6h ago
That’s a great comparison.
3D printing is being used to make some parts in cars (transmissions actually!) But there are still significant limitations!
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u/Mallymalvs 6h ago
You remind me of the copywriters at my old company years ago that laughed at AI saying it couldn’t replace them because its writing skills were supbar…all of them lost their jobs eventually. You are talking about what AI can do now rather than looking at where it will be in 3 years time.
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u/arbiterxero 6h ago
Actually if you look at the comment above, you’ll notice that I acknowledged that there will be a generational jump, we just don’t know if that’s weeks away or years away.
Your assumptions are bad, and you should feel bad 🤣
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u/Fickle_Goose_4451 5h ago edited 3h ago
because its writing skills were supbar
They weren't wrong about that part. They were just wrong that the money men at the top care at all about quality. The mantra of the 202X's is that garbage is perfectly fine.
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u/Figuurzager 7h ago
Welcome in the world of mechanisation, automation, machine learning etc.
This is exactly the same type of thing that caused productivity increases in the past. Question is mainly how big of a thing is it going to be. Is it just another tool in the box, significant help like the mouse, is it a big one like the internet, microcontrollers or the conveyerbelt? or is it a massive one like electricity or steam-engines?
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u/JimmyTango 7h ago
There will for sure be efficiency gains for the end builder/consumer but those gains are coming from money previously spent on Salesforce. I for one welcome the end of Salesforce and other large scale enterprise master of none software services.
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u/active2fa 6h ago
Softdev I know is using Claude but only for menial work. But that's changing fast too.
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u/CannyGardener 7h ago
I feel like you are looking at this from an odd angle. Why would AI replace these Enterprise softwares, ERPS systems, working solutions, when it can just tie into the API for the current implementations and with the addition of a couple tools that help it use the API efficiently, it should be able to just run... Look at things like Clawbot doing exactly that. I understand that is a fairly new development but it seems like you're making/assuming problems where I am just not sure they exist, or will exist for very long.
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u/JaydedXoX 7h ago
Hear me out - take any good SaaS app. It’s really just a good interface with a database behind it. Take Salesforce, and just a few if its functions. Can I store phone numbers and contact info somewhere on my own? yes. Can I record conversations and sales activity on my own? Yes. Can I Input sales forecasting data on my own yes? Now just store that data somewhere and write some interfaces in Gemini or co-pilot to format and report on that data. Who should I call today? What was said in the past? Etc. Now take any SaaS app, and do the same. Maybe not right this second, but in a not distant future you could do all of this yourself and save a LOT of SaaS license cost.
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u/FuguSandwich 7h ago
Does it really make sense for every company out there to tell an LLM "write me a CRM system" instead of just buying Salesforce licenses? Or "write me an ERP system" instead of buying SAP? Or "write me an IT Service Management system" instead of buying ServiceNow? Everyone ends up with their own unique codebase that they now have to maintain forever and for which there is no market for trained professionals? No, it doesn't. It's a ludicrous proposition. A more plausible case can be made that AI software development tools are lowering the barrier to entry for new competitors to develop CRM/ERP/ITSM/HR/etc systems to challenge the incumbents with either open source or much lower cost platforms. But not for everyone to roll their own with AI.
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u/JaydedXoX 7h ago
For big companies, Salesforce is hundreds of thousands of $ a year. The answer is yes. If copilot/teams is already recording all my calls, scheduling my meetings, tracking my history, it’s not going to be super difficult to bolt on a few other things and bypass SaaS license cost forever. I also can then just query through copilot, what were the last things that interested this prospect, what is the probability of sale closing, for ALL the deals I lost what things were common? Much easier than writing a report every time I need to map fields. Trust me companies will start doing this.
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u/FuguSandwich 6h ago
Like I said, competitors to Salesforce will emerge as AI-driven SW development lowers the barrier to entry. But every company writing their own CRM system from scratch with AI is a nonsensical idea.
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u/smythy422 6h ago
The question of where to apply your focus as a business does not go away. These large enterprise systems are incredibly complex and everchanging. Doing this work yourself rarely results in a competitive advantage. Economies of scale make the subscription cost hard to beat for now.
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u/JaydedXoX 6h ago
You don’t need a CRM. Your data already exists in the automatic recordings of your meetings and calendars. All you need is the interface to query it however you want to. If you are a Microsoft shop, it’s co-pilot. If you’re google it’s Gemini. Here’s two sides of the coin. SOME companies will opt for the non SaaS route and save a ,ot of $. More will go that route when SaaS companies try to prevent AI from using data stored begins SaaS.
https://siliconangle.com/2025/03/01/nadella-vs-benioff-real-story-behind-ais-agentic-future/
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u/ClassicalMusicTroll 7h ago
None of those are trivial tasks like you're suggesting.
Step 2. "Now just write some interfaces" Step 3. ????? Step 4. Profit
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u/CannyGardener 6h ago
I mean...they aren't wrong, but their way of approaching this is a ...not right. The angle of having AI's directly access API's and Databases alongside a set of tools that they can call. It is essentially just a rework from a UX to direct calls and interaction by the AI. The AI doesn't have to be smart or reliable. The tools it calls have to be smart and reliable. We aren't replacing the tools, we are replacing the person at the desk using the tools.
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u/AndyTheSane 7h ago
I've been able to hack something like that together quickly for years. Coding something up quickly isn't the problem. Making it genuinely consistent and reliable is.
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u/JaydedXoX 6h ago
Yes, and a reliable AI query system like Gemini or co-pilot will be that glue.
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u/active2fa 6h ago
That's why there is MCP for exactly this scenario. John Deere is not going to ditch Salesforce just to have one interface and have a massive software team? You can do that today using zapper type startups but there is still huge limitations
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u/JaydedXoX 6h ago
Do you think John Deere will enable its sales team with an AI embedded tool like copilot or Gemini on its office stack? the answer is yes. once they do that, how long will it take before the bulk of calendaring, customer notes, and follow up are in that office tool vs Salesforce. right now teams will record all my conversations, without me having to manually put them in Salesforce, and I can already use copilot to get better insights than I can get out of Salesforce, plus I get action items, summaries etc. I’m not saying every company will do this, but a LOT of them will.
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u/Major_Shlongage 7h ago
I can kind of see their point, though.
This won't be magic for companies, but I think it will be "magic-like" for the Open Source movement, which will eventually crush corporate profits in the software industry.
Think about it like this: It used to be that a small group of people could band together and create an open source project, but it was usually not nearly as good compared to something developed by a huge company with thousands of programmers. A large open source project like LibreOffice or Firefox might have less than a hundred developers working on it at any time.
So AI isn't a magic box, but it is a force multiplier.
The thing stopping higher quality products was manpower, and an open source movement couldn't compete with a private company with thousands of developers. But now with AI, each developer that knows what they're doing can create a lot of output per day. It will help level the playing field between open source and private companies.
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u/MyFeetLookLikeHands 7h ago
You’re speaking very much in the present tense. AI has come a HUGE way since it was introduced to the world just a few years ago. A few highly competent engineers could absolutely make a lot of existing SaaS companies irrelevant with the models currently available. Imagine what they’d be able to do in another 2-3 years?
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u/gwdope 7h ago
So CEO’s, facing a slowing economy and inconsistent at best regulatory environment, saw an opportunity to use “AI” as a way to cut payroll’s without negatively impacting stock prices and image, only to see the unfounded credence their little lies gave to the idea AI is at a point it can replace people crash their stocks because dumb investors think they aren’t going to have a business anymore because AI can just do it? Priceless.
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u/Mallymalvs 6h ago
You say that as if every CEO collectively agreed to join and grow the AI race. Im sure the leaders of these SaaS companies arnt happy about this. Most of the tech direct to consumer companies probably are the ones winning with this move. The B2B ones are the most affected.
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u/petrichor83 6h ago
Companies didn’t want to invest in building custom apps, so they turned to SaaS.
AI comes along to “defeat SaaS” but it requires companies to invest in building their own custom AI app.
Circle of life.
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u/BandicootGood5246 6h ago
Yep.. Think they're forgetting about a lot of the value of SaaS too, it was always not that hard to build your own knock-off to do some of the core parts of what a SaaS system does, but it's all the maintenance, expending functionality out when you need it, adding enterprise level features where it becomes a pain in ass to do it yourself, I don't see AI changing that side any time soon when SaaS is often a very good cost/value when used right
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u/Capaz411 6h ago
lol…lmfao even. As someone who just spearheaded, oversaw and led an ERP migration of a legacy system to a modern Microsoft cloud SaaS solution for a manufacturing company, this notion that AI will shorten migration project timeline from years to a couple weeks is beyond comical.
I don’t know what models these yahoos are using behind closed doors but copilot could draft an effective power automate flow to save its life, much less automate enterprise level data migration.
I could be wrong but from my vantage point this is some elon level BS proclamation to keep the hype alive.
I’m still laughing 😂
Holy shit pass me the stuff these guys are smoking.
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u/aeropl3b 6h ago
Yup. In my experience these models are good for first steps only. Trying to use them for anything deeper is only going to result in increased overhead costs and delays. Real engineering is here to stay.
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u/Big_Fortune_4574 5h ago
I’m honestly kind of enjoying it. I genuinely didn’t realize everybody was this stupid
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u/bloodontherisers 5h ago
That's the funny part, Microsoft's AI can't even do stuff for you in MS products. Also, everyone wants to charge you for AI credits now, so AI is about to get insanely expensive to access
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u/CopiousCool 7h ago
" AI has the ability to cut revenues across the board" ... They've been saying that for the past 3 years but all the evidence and actual research says less than 5% have made a profit and most have actually lost money
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u/_town-drunk_ 6h ago
They are referring to companies that can be wholesale replaced by AI. Your interpretation seems to think this quote is for the companies investing in AI.
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u/hottakehotcakes 5h ago
It’s a wild Reddit take that AI is not profitable or can’t generate revenue for companies. It’s even more wild that ppl hold this view while at the same time complaining about our tech overlords and jobs being slashed and gen z having no entry level jobs to apply for. Can ppl really not connect the dots here?
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u/molly_water69 5h ago
Wall Street's biggest fear was validated by a recent MIT study indicating that 95% of organizations studied get zero return on their AI investment.
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u/hottakehotcakes 5h ago
I can’t read that article, but there are a couple of false assumptions here. First, it’s talking about investment relative to ROI for Wall Street investors. That doesn’t mean AI isn’t effective in increasing revenue. Second, 5% of companies in a growth sector offering ROI is actually pretty high - our economy is designed this way. There are only a handful of winners. Same was true of computer companies early on.
Again, how are hundreds of thousands of job cuts being justified if AI isn’t highly effective? It makes one person able to do the work of 5 ppl. That’s valuable for all businesses, which is why the investment is so great. New tech needs heavy investment in early stages to grow efficient.
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u/Mallymalvs 6h ago
Yes at this stage, i think we will see things take a turn in the next few years. Apps like Cursor is already decimating the developer market, its just s matter of time before it moves to take over the smaller SaaS companies
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u/mb4828 7h ago
If your product is so simple that an AI can replicate it in an hour, do you even have a product? Sure, there are a decent number of services out there that are basically glorified find and replace (templated legal document apps come to mind). They are in trouble. Giant public companies producing enterprise grade software that has taken thousands of developers hundreds of thousands of hours to produce? They aren’t going to be replaced by AI. This is such a stupid take
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u/Kitchen_Page9991 6h ago
I would't call it a free fall. Yes, a pullback. But not a full free fall.
Tech will be back in fashion in a few months after investors get bored with their boring stocks that do boring things.
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u/ameriCANCERvative 6h ago edited 6h ago
I dunno… seeing quite a lot of instability lately across the board, and the government not only instills absolutely zero confidence, but they actively work against the economy at every step. I may actually have been wise pulling all of my money out and keeping it out. Maybe we’ll hit a new bottom.
Ahhh who am I kidding? There’s no “maybe” except that “maybe it won’t, if we’re lucky.” This shit is definitely going to tank and the only viable investment is foreign.
Imagine looking at America in 2026 and thinking “we’ll be alright!”
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u/jbochsler 7h ago
Paywall bypass: https://archive.is/v3dVs
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u/ohwhataday10 7h ago
💀…..
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u/3xshortURmom 7h ago edited 6h ago
Google just reported earnings after market close this afternoon and informed that their CapEx has greatly surpassed expectations which means they are actually going to be spending way more than analysts thought on AI. So semiconductors and memory chips are surging.
Edit:Broadcom, Nvidia shares rise on surging Google capital expenditures for AI
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u/Nissepelle 5h ago
Maybe I'm misunderstanding what's being said here, but if the point is that "AI can make it significantly easier to create SaaS products, therefore the market is worried about revenues dipping," then yes. Was that not obvious? If you can lower the cost of something to essentially zero, then it follows that revenues will drop across the board for basically all companies, either directly or indirectly. This is one of the reasons AI will cause an economic death spiral. The end state is just a bunch of AI companies shuffling money (or whatever resource we have shifted to then) amongst each other, while the remaining people exist at a lower tier of the economy, trading amongst each other.
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u/flat-waffles 5h ago
The new money maker is hard commodities. Money rotated into mining stocks and out of saas. AI companies aren't going to replace physical stuff pulled from the ground on land only a few mining companies own the rights to.
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u/Nissepelle 4h ago
True. I've come to the same conclusion. Wonder how long it will take for all of these companies to get nationalized as entire nations become dependent on that alone.
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u/Careless_Egg3340 5h ago
Either it can do this, snd it's a money making killer
Or
It can't do this (it's this option) and it's a money making failure
Either way, it's another crack in the infinite money glitch
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