This feels a lot like the old RPA hype cycle to me — more sales narrative than structural change.

Most companies are not going to replace stable SaaS with a pile of AI-generated internal tools. They don’t want the maintenance or the risk.

If there’s a real B2B game changer, it’s Microsoft.

The day Excel gets a serious, domain-aware AI that can actually model workflows, clean data, and automate logic properly, half of these “build vs buy” debates disappear. People will just solve problems where they already work.

Excel has always been the real business platform. AI will just double down on that, not kill SaaS.

While the author is wildly overstating things, I do think AI is striking at the heart of the SaaS problem, which is the business model of "pay us $10-100+ per employee per month in perpetuity or we will hold all your data and your company's operations hostage". There is always going to be value in good software, but it is shitty vendors relying on the lock-in effect that are in danger. And good riddance.

The other issue is valuations - B2B SaaS stocks have never been rooted in reality, and the 100+ P/E ratios were always going to come down to earth at some point.

> AI is killing B2B SaaS

Anecdata sample size of one, but this is not my experience at all. My business has only continued to grow over the past couple years, and I don't think I've had a single customer mention AI to me at all (over the phone or email).

The reason for divergence is actually much simpler. NASDAQ 100 includes data center builders, Morgan Stanley software index doesn't. Stock market is going down across the board if you exclude data center construction.

Here is the list of evidence the author gives for why AI is the reason software company stocks are down:

I don't see that happening because companies need to concentrate on their differentiators. Is your enterprise vibe coding its own SaaS? Who's taking care of it?

Reminds me of the story of when the Surgeon General (in the US) reported that smoking causes cancer.

People stopped smoking immediately, and cigarette sales tanked. The cigarette companies laughed (with all the phlegm in their throats and lungs) and sales came back 1-2 weeks later.

I suspect in a few months or a year companies with vibe-coded replacements for SaS products will find they need to go back: But, just like how many less people smoke today than in the past, the writing is clearly on the wall. At some point someone will figure out how to replace SaS with AI; it's just going to take a lot longer than many think.

One problem with centrally produced and distributed software is that a small subset of users demanding certain features results in feature bloat for everyone. Costs for all features are shared by all users.

Probably one way SaaS companies will adapt is to break up their offerings into more modular low cost components. While many customers will end up paying less, the addressable market will probably increase because of the new low cost options.

With a new agentic-lashup tearing across the internet every week, pointing the way to "gradient descent" software development, any purchasing manager worth their salt is going to ask some serious questions about their enormous SaaS bill before committing to another expensive long term contract. It follows that valuations must decline. Even if only because risks to moats have increased, but also because it makes sense to negotiate hard on pricing when there's fear in your counterparty.

Anyone can learn to cook, and the barrier to entry is low. There's no shortage of restaurants though.