Hello again, and thank you, as always, for spending time with Fast Company‘s Plugged In.
In a remarkably influential 2011 Wall Street Journal op-ed, Netscape and Andreessen Horowitz cofounder Marc Andreessen declared that software was “eating the world.” From entertainment to commerce to transportation, he argued, startups that were about code at their core were disrupting many of the world’s most deeply entrenched businesses. That was just the beginning, he warned: “Companies in every industry need to assume that a software revolution is coming.”
Fifteen years later, we know that some of the disruptors Andreessen cited—such as Zynga, Groupon, and Skype (RIP)—did not, in fact, eat the world. His larger point, however, played out much as he predicted. Software really does run everything these days. And many of its purveyors are among the most successful companies in the world.
Recently, however, Wall Street has been spooked by the possibility of another sea change in the making: AI might be on the verge of eating software. The sudden leap forward in the capability of software-writing LLM tools such as Anthropic’s Claude Code has investors worried that the corporate behemoths currently making tidy profits by selling subscription-based software—particularly for enterprise customers—might find themselves unable to compete with apps coded by AI for very little cost.
This theoretical collapse of the software industry is known as “The SaaSpocalypse,” a name I hate but can’t quite avoid acknowledging. (I promise not to bring it up again.) It’s reflected in the stock performance of such seemingly robust companies as Workday (down 35% year to date), Adobe (-26%), Salesforce (-25%), Autodesk (-21%), and Figma (-19%). On February 23, after Anthropic published a blog post touting Claude’s ability to modernize software written in the 66-year-old COBOL programming language, IBM—COBOL’s kingpin for most of that time—saw its biggest one-day stock drop in more than a quarter century.
Investors are right to expect that AI will radically change software as a business in the coming years. The evidence is already here, in the form of developments such as Block—the parent company of Square—announcing on February 26 that it’s terminating 40% of its 10,000 employees. Explaining the brutal reduction, CEO Jack Dorsey contended that AI will allow a smaller team to accomplish more and do it faster, and said he was getting ahead of an inexorable industry-wide trend. What happens next remains to be seen, but Block will surely never be the same.
Still, Wall Street’s apparent belief that AI spells bad news for today’s software titans is premature, and possibly just misguided, period. It’s certainly heavy on vibes rather than hard data: Monday’s dip in the S&P 500 apparently stemmed in part from a dystopian imaginary June 2028 memo published by Citrini Research. Laying out a sweeping nightmare involving AI crushing the US economy, it name-checked specific companies such as DoorDash and Zendesk as being incapable of competing with AI-infused apps and agents. Well, maybe, though even the document’s authors admitted they were “certain some of these scenarios won’t materialize.”
