AI agents are starting to eat SaaS

Summary

We spent fifteen years watching software eat the world. Entire industries got swallowed by software - retail, media, finance - you name it, there has been incredible disruption over the past couple of decades with a proliferation of SaaS tooling. This has led to a huge swath of SaaS companies - valued, collectively, in the trillions. In my last post debating if the cost of software has dropped 90% with AI coding agents I mainly looked at the supply side of the market. What will happen to demand for SaaS tooling if this hypothesis plays out? I've been thinking a lot about these second and third order effects of the changes in software engineering. The calculus on build vs buy is starting to change. Software ate the world. Agents are going to eat SaaS. The signals I'm seeing The obvious place to start is simply demand starting to evaporate - especially for "simpler" SaaS tools. I'm sure many software engineers have started to realise this - many things I'd think to find a freemium or paid service for I can get an agent to often solve in a few minutes, exactly the way I want it. The interesting thing is I didn't even notice the shift. It just happened. If I want an internal dashboard, I don't even think that Retool or similar would make it easier. I just build the dashboard. If I need to re-encode videos as part of a media ingest process, I just get Claude Code to write a robust wrapper round ffmpeg - and not incur all the cost (and speed) of sending the raw files to a separate service, hitting tier limits or trying to fit another API's mental model in my head. This is even more pronounced for less pure software development tasks. For example, I've had Gemini 3 produce really high quality UI/UX mockups and wireframes in minutes - not needing to use a separate service or find some templates to start with. Equally, when I want to do a presentation, I don't need to use a platform to make my slides look nice - I just get Claude Code to export my markdown into a nicely desi...