Remember when Software-as-a-Service was the golden goose of investing? Those beautiful recurring revenue models where companies charged $50 per month per employee to use their fancy dashboards? Yeah, well, AI just walked into that party with a sledgehammer.
We’re calling it “SaaSmageddon” – and it’s not your typical tech selloff. This isn’t about interest rates or macro fears. This is about AI agents literally making human workers (and their software licenses) obsolete.
The $30-Per-Seat Gravy Train Is Derailing
For 15 years, SaaS companies had the ultimate business hack: build a decent interface, connect it to a database, and charge companies for every human who logged in. More employees = more money. Simple math.
But here’s the plot twist: AI agents like Anthropic’s Claude Cowork don’t need user accounts. They can research, analyze, and execute multi-step workflows without a single human babysitting them. When one AI agent can do the work of five junior analysts, companies don’t just need fewer employees – they need fewer software licenses.
Suddenly, that beautiful per-seat revenue model looks about as sustainable as a chocolate teapot.
Three Ways AI Is Nuking Software Stocks
The Middle Layer Massacre: Most SaaS companies are just expensive middlemen between humans and databases. AI agents can now talk directly to APIs and databases without needing pretty dashboards. Who needs a project management tool when AI agents can coordinate with each other?
Creation Gets Commoditized: Google’s Project Genie can turn a simple prompt into a full video game. When small teams can build apps in days instead of months, why pay premium prices for legacy creation tools?
The Profit Reality Check: After three years of AI hype, investors stopped asking “What’s your AI strategy?” and started asking “Where are the actual profits?” Spoiler alert: they’re flowing to chip makers like Nvidia, not software companies.
The Survivors vs. The Walking Dead
Red Zone (Toast): Workflow tools like Asana and Monday.com, generic CRM platforms, and content creation tools are in the blast radius. If an AI agent can do it for $20/month, these companies are in trouble.
Yellow Zone (Wounded but Breathing): Giants like Adobe and Microsoft are too big to fail but face serious margin pressure. They’ll survive, but their 100x valuation days are over.
Green Zone (The Fortresses): Companies with regulated data, cybersecurity exposure, or physical-world integration are the winners. Palantir structures messy data that AI needs. CrowdStrike benefits because AI makes cyberattacks cheaper to launch. Tyler Tech handles local government software that AI can’t navigate.
The Bottom Line
This isn’t a tech bubble – it’s a tech reshuffle. The value is flowing away from the “middle layer” software companies toward the extremes: the compute infrastructure (chips) and the data fortresses (specialized, regulated software).
Before buying any software stock, ask yourself: “Can a $20/month AI agent do this job?” If the answer is yes, and switching costs are low, you might want to find the exit.
The agents are coming. Choose your stocks wisely.