It used to be that if you invested in SaaS, you slept well at night. Returns were predictable because the business model was subscription-based and incredibly scalable: build a horizontal cloud-based platform to target as wide a market as possible, charge per seat and grow by expanding the user base. Salesforce 1, Workday and their peers returned billions to investors on that model. But now, due to AI, where AI agents are replacing humans as the user (through what the industry calls 'headless' models) and upending the per-seat model, the SaaS market has lost its predictability. January's $300 billion single-session wipeout is a leading indicator that the old SaaS model has passed its peak. Investors are retrenching and trying to predict what's next as the three frontier AI companies vault into the public markets at multitrillion-dollar valuations. We would argue that these infrastructure platforms enable the next wave of software innovation: AI-native software that automates and...
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