Theses›Software & applications›AI eats SaaS

AI eats SaaS

Agentic AI decouples software value from seat count — flattening-to-shrinking per-seat revenue in workflow-automatable categories (0-3% CAGR) while the dollar TAM grows only ~8-10% — and in the ~$210B of exposed spend, AI-native entrants OWN new categories worth a ~$55-65B…

  • Bull
  • Open
  • $447B by 2035

The callThe drivers win: pricing is leaving the seat and AI-native companies take the jobs whose moat was a screen. The view is now the published consensus.

D1D2R1R2C1foragainst D1D2R1R2C1foragainst
Fig. 1The balance. Drivers and catalysts against restraints, each block sized by its weight; catalysts hang dashed because they have not happened yet, sized by their odds. It tips toward the drivers.
  1. D1Pricing is leaving the seat: about half of ServiceNow's net-new business is non-seat and Salesforce prices Agentforce per resolution.
  2. D2AI-native owners reach scale fast, Cursor at about $4B ARR and Harvey at about $300M, both in about three years.
  3. R1Incumbents book the AI revenue too: Now Assist at about $1.5B of contract value, Microsoft's AI run-rate above $37B, and seat revenue holding up.
  4. R2Disruption runs slower than the tape, Klarna walked back its cuts, and the best exit so far is the incumbent buying the insurgent (Moveworks to ServiceNow, $2.85B).
  5. C1Consumption or outcome pricing passes 50% of net-new business at two or more major incumbents, confirming the seat is no longer the unit of sale.Q1 2027
Rests onthe beliefs underneath
Supported by · confidence
Threatened by · confidence
What would prove itdated tests, open and resolved
20272028today123predictionswatch 20272028today123predictionswatch
Fig. 2Each ring is a dated test: dashed while open, struck through when overdue, ticked or crossed once resolved.
  1. 1Consumption pricing above 50% of net-new at two incumbents, and a Cursor or Harvey-class company crossing its next ARR tier without seats.Mar 2027 · open
  2. 2Per-seat revenue in AI-exposed software categories FLATTENS or shrinks (0-3%) at the incumbents through 2027, while consumption/outcome pricing takes >50% of net-new.Dec 2027 · open
  3. 3Per-seat revenue in customer service, coding and support at ServiceNow, Salesforce and Workday: above 8% growth and the view is wrong.Dec 2027 · open
  • ·AI-native retention and margins, and whether consumption pricing grows or shrinks total dollars.
Expressionslisted, private, technologies
Private · 11 private companies, 9 of them in the US.

Uhubs · OpenAI · Anthropic · Cursor (Anysphere) · Harvey · Sierra · Decagon · Cognition · Glean · Lovable · Abridge

Technologies
Who has already bet on itprivate rounds, from public sources

$197B raised by 10 companies, $197B of it in the last three years. Wave under way: Large rounds in the last three years; the category is funded and getting crowded.

Backed by a top-tier venture firm: OpenAI, Anthropic, Cognition, Cursor (Anysphere), Sierra, Lovable, Harvey, Abridge, Decagon, Glean. Backed by a strategic investor: OpenAI, Cursor (Anysphere), Lovable.

2 more funded companies in the market.

What changedthe record, newest first
  • 26 Jul 2026Sized it properly and the market is nearly double what I had. The edge is the problem, not the size.