Basket representing publicly traded enterprise software-as-a-service companies across various verticals.
3 takes · first discussed Jan 4, 2025
Private company — no public price to score. We track what they said; valuation-mark tracking is on the roadmap.
Chamath predicts the 'software industrial complex'—large bloated enterprise software companies—will face severe fissures in 2025 as AI-native companies undercut them dramatically on price while delivering equivalent functionality.
Friedberg doubles down on his prior year prediction, citing per-seat pricing compression and companies replacing traditional SaaS with in-house AI tools as the key headwind.
Gavin Baker predicts enterprise application software will be the worst performing asset in 2025, as AI agents replace the need for traditional SaaS and the big cloud providers dominate the agent layer.
All three contributors are high-conviction bears on enterprise SaaS heading into 2025, with no disagreement on direction. Guest Gavin Baker argues that AI agents will erode the need for traditional enterprise applications, and that incumbents are structurally disadvantaged because they lack proprietary models and compute, leaving the agent layer to the major cloud providers. Chamath frames the threat as a pricing disruption, predicting that AI-native competitors will undercut bloated legacy vendors dramatically while delivering comparable functionality. Friedberg reinforces that view from a revenue-model angle, emphasizing that per-seat pricing compression and the rise of in-house AI tooling will squeeze vertical SaaS players in particular — a thesis he held in the prior year and is doubling down on. Collectively, the hosts see AI as a fundamental structural threat to the enterprise SaaS business model, not merely a cyclical headwind.
Chamath predicts the 'software industrial complex'—large bloated enterprise software companies—will face severe fissures in 2025 as AI-native companies undercut them dramatically on price while delivering equivalent functionality.
I think that there are these large bloated, in many cases, enterprise software companies that effectively have convinced incredible numbers of organizations to spend a tremendous amount of money essentially wrapping a bunch of heuristics”1:24:46
Friedberg doubles down on his prior year prediction, citing per-seat pricing compression and companies replacing traditional SaaS with in-house AI tools as the key headwind.
I'm probably just going to triple underline vertical SaaS again. Per-seat pricing model being challenged, pricing being compressed as companies explore in-house tools built with AI that replaces these kind of traditional business practices.”1:28:16
Gavin Baker predicts enterprise application software will be the worst performing asset in 2025, as AI agents replace the need for traditional SaaS and the big cloud providers dominate the agent layer.
enterprise application software, I think, is going to be in a lot of pain. And some of these companies are talking a big game about agents, but at the end of the day, they don't have their own models, they don't own their own compute, and”1:23:35