Martín Escobari, the co-president of General Atlantic, said the Software as a Service (SaaS) model has declined by up to 50 percent [1].
This shift suggests a fundamental disruption in how companies deliver and monetize software. As artificial intelligence automates tasks that previously required dedicated subscription tools, the traditional recurring revenue model faces an existential threat.
Escobari said these observations during an interview with the Hot Market program on CNN Brasil [1]. He said the downturn is linked directly to the rapid advancement of artificial intelligence, which is changing the value proposition of software delivery [1].
The SaaS model has long been the gold standard for tech valuations due to its predictable income streams. However, the integration of AI allows for more flexible, outcome-based pricing, or the total replacement of niche software tools by general-purpose AI agents [1].
General Atlantic is one of the world's largest growth equity firms, meaning Escobari's assessment reflects data from a wide array of global portfolio companies [1]. The reported decline of up to 50 percent [1] highlights a volatility that few analysts predicted during the initial AI boom.
While many companies are currently integrating AI into their existing platforms, Escobari said the structural impact on the business model itself is already evident [1]. The transition may force a pivot toward new pricing strategies to maintain profitability in a landscape where AI reduces the need for manual software interaction.
“the Software as a Service (SaaS) model has declined by up to 50 percent”
The potential 50 percent decline in the SaaS model indicates that AI is not merely an add-on feature but a disruptive force that commoditizes software. If the industry shifts from seat-based subscriptions to usage-based or value-based pricing, it will trigger a massive re-evaluation of tech company valuations and investment strategies across the global venture capital landscape.
