DeepSeek just dropped a bombshell: $200M in annual revenue with a 500%+ profit margin—all while charging 25x less than OpenAI. But DeepSeek didn’t just build another AI model. They wrote their own parallel file system (3FS) to optimize costs—something that would have been unthinkable for a company of their size. This was possible because AI helped write the file system. Now, imagine what will happen in a couple of years—AI will be writing code, optimizing infrastructure, and even debugging itself. An engineer with AI tool can now outbuild a 100-person engineering team.


Disappearing Pillars


For years, the freemium business model, cloud computing, and AI have been converging. First, the internet killed the need for sales teams (distribution moved online). Then, serverless computing eliminated IT teams (AWS, Firebase, you name it). And now, AI is breaking the last barrier—software development itself. This shift has been happening quietly for 15 years, but AI is the final straw that breaks the camel’s back.
This kind of disruption was previously limited to narrow consumer products like WhatsApp, where a 20-member team built a product that led to a $19 billion exit. But now, the same thing is happening in business applications that requires breadth. AI will be able to build complex applications that were previously impossible for small teams. Take our own experience: Neartail competes with Shopify and Square, and it’s built by one person. Formfacade is a CRM that competes with HubSpot—built by one person. A decade ago, this wouldn’t have been possible for us. But today, AI handles onboarding, customer support, and even parts of development itself. So, what does this mean for SaaS? It won’t disappear, but it’s about to get a whole lot leaner.


Double Threat to Big Companies

For large incumbents, this shift isn’t just about new competition—it’s a fundamental restructuring of how software businesses operate. They face a double threat:
  1. They must cut down their workforce, even if employees are highly skilled, creating a moral dilemma.
  2. They have to rebuild their products from scratch for the AI era - a challenge for elephants that can't dance.
Look at payments, for example. Stripe charges 3% per transaction. We’re rolling out 2% fees for both payments and order forms because we use AI to read the seller’s SMS and automate the payment processing. It won’t hurt Stripe now—they make billions off Shopify’s transaction fees alone. But it’s a slow rug pull. First, AI-first companies like us will nibble away Shopify's revenue. Then, a few will break through and topple Shopify. And, only then will incumbents like Stripe feel the pinch as a second order effect.


Summary

This is a massive opportunity for startups right now. While the giants are trapped in their own complexity, nimble teams can build and launch AI-native solutions that directly challenge established players. Target a bloated SaaS vertical, rebuild it from the ground up with AI at its core, and position it as the next-generation alternative.
For example, the future of CRM isn’t just software—it’s software + sales team. Startups that don’t want to hire salespeople will eagerly adopt AI-driven CRMs that automate outreach, and follow-ups. Meanwhile, large companies will hesitate to fire their sales teams or switch from legacy CRMs due to vendor lock-in. But over time, startups using AI-native CRMs will scale into large companies themselves, forcing the laggards to transition or fall behind.
This is why we say, “The future is here, but not evenly distributed.” The AI-native solutions of today will become the default for the next wave of large enterprises. The opportunity isn’t in building software for existing companies—it’s in building it for the startups that will replace them. For founders starting companies today, this is Day Zero in the truest sense. The AI-native companies being built now are the ones that will define the next decade of SaaS. It’s not just disruption—it’s a complete reset.