2011, venture capitalist Mark Andreessen I wrote it,Software eats the world. ”
He predicted that software would take over a massive strip of the economy, and that's exactly what happened. The book became software and Amazon defeated Barnes & Noble. The film became software and Netflix won. Music has become software, and Spotify has become a rule surrounding labels.
Now we are entering a new era where several software companies are eaten by AI. This technology makes it easier to use and create new software, challenging established SaaS providers and future business models.
Newer versions of the software are displayed in many sectors, including legal services, graphic design, marketing, HR, and healthcare. What was previously an individual software product could be nothing more than a series of plain English requests entered into a chatbot or AI model. AI coding tools make it easy to create your own software, rather than buying them.
“Zero terminal value”
This has had a major impact on the software industry and the millions of employees who rely on using this wide range of technology. Wall Street notes that stocks in several established software vendors have declined dramatically in recent months.
These AI software jitters have reached such strength that RBC analysts had to publish a big research note on Monday instructing investors to settle. They emphasized that core records systems, such as enterprise resource planning software, are likely not at risk. Still, their discoveries were not particularly encouraging.
“Incumbents need to be more aware of relying on incumbents as their default advantage, and do not underestimate potential AI destruction, especially with larger features commoditization, moat erosion, and margin pressure on the horizon,” writes RBC analysts.
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A day later, these same RBC analysts warned that the “zero terminal value” story had sneaked into Hubspot's stock. Some investors question whether the generator AI can replace elements of software companies' inbound marketing models. Hubspot stocks have fallen by about 35% this year. Similar concerns are worrisome to other SaaS companies, such as Salesforce, which took around 25% in 2025.
Adobe and Graphic Designers
Another software provider under AI pressure is Adobe. The company was initially considered an AI winner, but this year its inventory has dropped by around 20%. I think this is a perfect example of how generative AI is beginning to undermine software business models and disrupt related jobs.
Within Adobe, some employees worry that AI may reduce the need for graphic designers, a key customer of company image editing and creation software such as Photoshop and Illustrator.
Business Insider's Eugene Kim wrote exclusively about this in the summer of 2023. Kim quoted a senior designer at Adobe. Adobe has warned internally by businesses planning to reduce the size of their graphic design teams due to new AI text-to-image capabilities. “Is this what we want?” he asked his colleague.
Adobe says it has a history of introducing new technologies that lead to productivity and work. Still, the issue is occurring with revenue calls, and analysts are asking analysts if they can reduce the demand for Adobe software.
As this AI technology becomes more powerful and easier to use for more people, it could reduce the demand for the skills of professional graphic designers. AI Systems could eliminate 300 million jobs worldwide, including a quarter of the arts and design industry, Goldman Sachs estimates.
Google Banana
Please enter Google. This week, the internet giant released a new AI photo editing tool and baked it into the Gemini Chatbot service. An early version of this tool was called Nano Banana and I wanted to preserve its name. I have no choice.
Users of the free version of Gemini use simple natural language requests to get close to 100 images per day, either edit or create. There is also a paid version of the Gemini Chatbot, which costs $20 a month. This includes up to 1,000 images per day and hosts other features that compete fairly well with ChatGpt.
Compare it with Adobe Photoshop. This is a bit difficult to use and usually requires some training to get skilled. Individuals cost around $23 a month, and there are few additional AI bells and whistles that Gemini has.
I tried out this new Gemini image editing tool using Hugh Langley from Business Insider. It was fast, easy to use and free. Why pay Photoshop $23 a month when Google offers similar features for free or less money?
Adobe says it can integrate AI into a software suite and create authors can move work seamlessly between apps. However, on the same day Gemini was upgraded, Adobe adopted Google's new AI image model to enhance some of its own tools.
Not surprising: Adobe Stock fell on Tuesday, when Google's launch was released. The stock has lost at least 30% over the past five years, and the company has been worth around $150 billion. Google's market capitalization is $2.5 trillion.
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