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Eric Siu breaks down a $5.5 trillion market shift from traditional software to services delivered by AI. Instead of paying per seat, companies will pay per output. An AI agent costing $2,000 a month could replace an $80,000-a-year agency.
Eric Siu breaks down a $5.5 trillion market shift from traditional software to services delivered by AI. Instead of paying per seat, companies will pay per output. An AI agent costing $2,000 a month could replace an $80,000-a-year agency.
The $5.5 trillion rewrite, Neil. So when you look at software, okay, it's a $0.2 trillion market. Let's call that $200 billion. Okay. So Coatue did this report recently. Coatue is the— honestly, venture firm, but I think they do a lot of— Hedge fund. Yeah, hedge fund. Thank you for that. Coatue just put a number on what we're seeing at seed for 3 years. So software is a $0.2 trillion market. So $200 billion. Services as a software, $5.5 trillion. So 25x. The shift is from selling tools per seat to selling work per output. This is why the best vertical AI companies don't compete with software incumbents. They compete with expensive service providers, BPOs, and high turnover labor. At $2,000 a month, an AI agent is replacing an $80K a year agency. That's the new business model, right? So when you look at this, the $5.5 trillion rewrite over here, so from per seat to per output, 25x TAM expansion. So I think a lot of this is very early right now. I think a lot of us are still figuring this out. Um, but we're seeing this more. This is not something new. I think we've seen this like a year ago, 2 years ago or so, but I think we're gonna continue to see it because we're all kind of just figuring out as we go.
