Asger Risom
Software companies once sold themselves as the indispensable layer between workers and work.
Now, artificial intelligence is threatening to slip underneath them — or replace them outright.
For more than a decade, the software industry thrived on selling subscriptions that helped companies manage everything from payroll to sales. That model is now under pressure as AI tools begin to perform the same tasks without relying on traditional applications.
Recent product launches from leading AI labs have sharpened investor anxiety, raising questions about whether large parts of the software sector could be disrupted faster than expected.
A new kind of threat
According to Business Insider, concern intensified after Anthropic released Cowork, an autonomous AI agent capable of planning and executing multi-step tasks on a user’s computer.
Unlike chatbots, Cowork can access files, operate applications, generate documents, analyze data and automate workflows. Anthropic followed up by launching role-specific plugins for functions such as sales, finance and legal work.
Barclays analyst Raimo Lenshow asked in a recent note whether this marks “the end for software,” pointing to uncertainty around how AI will reshape long-term demand.
Why SaaS feels exposed
Traditional software companies make money by selling “seats” — subscriptions tied to employees. If AI tools make workers more efficient, companies may need fewer seats.
The bigger risk is structural. If AI agents can assemble workflows, generate dashboards and perform routine business tasks on demand, companies may no longer need single-purpose software products at all.
Business Insider reported that OpenAI added to the pressure by launching Frontier, a platform designed to help companies deploy AI coworkers across systems rather than inside a single app.
Investors take notice
The market reaction has been swift. Microsoft shares fell sharply after analysts compared Cowork to what Copilot was originally meant to be. Salesforce shares are down roughly 40% over the past year, according to market data cited by Business Insider.
Executives and investors are increasingly questioning what “moats” remain for software companies that are not themselves AI labs.
Pressure from both sides
Mid-sized software firms appear most vulnerable. Consulting firm AlixPartners said they are being squeezed between AI-native startups and large tech platforms bundling AI into existing products.
Pricing models are also under strain. AI systems are costly to run, making per-seat subscriptions harder to justify. Some companies are experimenting with usage-based pricing, but investors remain wary.
Software, but different
Core systems like databases and accounting software are unlikely to disappear soon. But the layers built around them — dashboards, reports and workflows — are becoming fluid and disposable.
As one AlixPartners executive put it, software companies now face a clear choice: adapt to an agent-driven future, or risk becoming what AI consumes next.
Sources: Business Insider, Barclays, AlixPartners
