AI and the Next Phase of the Software Cycle

The article discusses how advancements in generative AI are disrupting traditional SaaS business models, leading to a reassessment of the software industry’s revenue model, competitive outlook, and long-term earnings potential. It argues that while AI doesn’t replace software, it intensifies existing business models’ need for adaptation, creating significant dispersion between winners and losers in the market. The authors conclude that software is not broken, but the certainty that once defined it is being tested, requiring investors to position portfolios for durable advantage.