AI disruption has sent shockwaves through the software sector this year. On Tuesday, a top OpenAI executive hammered home the potential threat to this lucrative industry.
During a talk at a Goldman Sachs tech conference in San Francisco, OpenAI CFO Sarah Friar was asked about recent comments her boss made about the SaaS business.
OpenAI CEO Sam Altman recently tweeted, “entering the fast fashion era of SaaS very soon.”
Friar explained that the fast fashion phenomenon radically changed the apparel retail industry, and now the software-as-a-service business may be about to experience a similar disruption.
“The whole value chain is getting disrupted. The people who will get left behind are not embracing AI fast enough,” Friar said. “I don’t think it’s AI that steals your job or steals your company. It’s someone who is using AI deeply that’s going to disrupt you.”
Software stocks, including Salesforce and HubSpot, have slumped this year on concern that AI tools could make it easier for companies and developers to build their own software, rather than buying SaaS services.
This “buy versus build” debate has been a hot topic on Wall Street in recent months, with one study warning that over 100 public software companies risk getting squeezed between nimble AI startups and powerful AI-ready tech giants.
OpenAI’s Friar poured gasoline on this fiery debate on Tuesday.
Talented engineers and developers used to be in limited supply, so companies bought more software off the shelf from SaaS vendors. Now, AI coding tools make it easier to build software in-house, she explained.
“Why do I buy planning software off the shelf? Why do I buy procurement software off the shelf? Because no executive in their right mind is going to use their most precious resource, which is coders and developers, to build stuff like that,” Friar said.
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But in the new world of autonomous software development, it’s now possible to create bespoke software like this in-house.
“Why wouldn’t I code the kind of software that is exactly what OpenAI needs? Not what Goldman needs or any other company needs,” the CFO continued. “I think that is going to change the whole face of how software is developed.”
She cited an example of how impactful this could be.
In her finance team at OpenAI, many employees are coding agents and other tools to help them get their job done more quickly. This is partly why OpenAI’s finance group is roughly 18% of the size of finance teams at companies of similar size, the CFO explained.
“I love that, all day, every day,” Friar said.
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