Software in the Age of Intelligence

Enterprise software is undergoing a generational reset as AI collapses development costs and threatens traditional seat-based licensing models. The industry is shifting toward usage-based monetization and platforms that manage AI-driven complexity.

Key Takeaways

• 1.AI is lowering the cost of software creation, enabling AI coding tools to perform at the level of elite human programmers.
• 2.Traditional seat-based software models are under pressure as AI automates knowledge work, reducing the link between enterprise headcount and software demand.
• 3.The software sector is bifurcating into three camps: AI workload beneficiaries, pressured seat-based incumbents, and AI operating platforms.

Table of Contents

• Executive summary
• What AI has changed
• Implications for the industry
• The two disruptions
• Discernment: Three camps
• The new investment question
• Our investment framework
• The bottom line
• WHAT ARE THE RISKS?
• IMPORTANT LEGAL INFORMATION

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