Salesforce revealed next battleground in AI. It's not models
This analysis argues that software companies with proprietary data moats are better positioned for long-term success than those relying solely on frontier AI models. The author suggests that as AI intelligence becomes commoditized, the value shifts back to companies that own essential operational data.
Why it matters
It challenges the prevailing market narrative that AI model developers will capture all value, suggesting a shift in investment strategy toward data-rich software platforms.
Analysts and pundits in finance have an endless supply of clever, simplistic explanations for complex market movements. Over the years, culprits have ranged from El Niño and climate change to the World Trade Organization, rock 'n' roll music and the fluoridation of water. Many of these explanations proved wrong, yet commentators continue to reach for overly simple narratives to explain market moves. The latest example is the sell-off in software stocks.
For the past year, markets have vaporized roughly $2 trillion in software value by asking the wrong question about AI. The question behind the so-called "SaaSpocalypse" — can an AI agent do what this software does? — is misguided because it treats a software company as nothing more than a bundle of tasks waiting to be automated away.
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