Originally aired on MTS segment, Monetary Matters, Jack Farley and Max Wiethe speak with Ara Kharazian, Lead Economist at Ramp, about what real business spending data says about AI adoption, why the “SaaSpocalypse” narrative is overblown, and how companies are actually buying and deploying AI tools. They also discuss Anthropic overtaking OpenAI in Ramp’s AI Index, token-based pricing, AI productivity gains, and why many legacy software firms may be more resilient than people expect. Resources: Follow Ara on X: https://x.com/arakharazian Follow Jack on X: https://x.com/JackFarley96 Follow Max on X: https://x.com/maxwiethe Stay Updated: Find a16z on YouTube: YouTube Find a16z on X Find a16z on LinkedIn Listen to the a16z Show on Spotify Listen to the a16z Show on Apple Podcasts Follow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Why AI Isn’t Killing SaaS Yet

The a16z Show

# Full Transcript

**Podcast:** The a16z Show

## Participants

- **Jack Farley** (None)
- **Max Wheathey** (None)
- **Ara Karazian** (Ramp)

## Transcript

[SPEAKER_04] This is one of the most dynamic markets we've seen, particularly for buying software, where month over month you will see large incumbents be replaced by the newcomers. Anthropic just did that with OpenAI, now the most popular model used by businesses, according to Ramp data. Cursor did that with GitHub Copilot. My main take is that Seth Spockalypse as a pronouncement has come way too soon and is typically not informed by actual business behavior.

[SPEAKER_03] You're saying Seth Spockalypse is not in the data?

[SPEAKER_04] I'd say quantitatively, neither aspect of Seth Spockalypse is supported by actual business spend. Neither aspect as in it's going to change the way we buy it. Currently, it has not in any meaningful way, nor has it killed off at least the companies that are frequently mentioned.

[SPEAKER_02] This episode originally aired on the MTS segment, Monetary Matters. For the last two years, the dominant story in software has been that AI will wipe out SaaS companies, collapse seat-based pricing, and centralize everything around a handful of frontier model providers. But when you look at actual business spending data, that story becomes much harder to defend.

[SPEAKER_02] Many of the fastest growing AI companies are not model labs themselves, but the infrastructure, workflow, and application layers forming around them. At the same time, businesses are increasingly using multiple models, becoming more cost-conscious, and experimenting with AI in ways that don't neatly fit the prevailing narrative around automation and labor replacement. Jack Farley and Max Wheathey speak with Ara Karazian, lead economist at Ramp.

[SPEAKER_01] We have the lead economist from Ramp Economics. Ara Karazian, thank you so much for joining us today. Ara, you've written a number of pieces looking at this very topic. Are people changing their spending patterns? What are you guys seeing at Ramp?

[SPEAKER_04] Yeah, I mean, I think that's what's so important about this kind of work is that, you know, we live in this world, particularly in tech specifically, where everyone wants to make these big pronouncements about where the market's going to go. Everyone seems like a pundit. No one's really armed with any data to inform them about what's actually happening in the market. So I have this unique job at Ramp where, you know, we see the spend data from 50,000 businesses, $100 billion of annual spend. And so we did set out to research what is actually happening in the market.

[SPEAKER_04] New AI companies are coming out with competitor products to a lot of prominent SaaS firms. Are we seeing any declines in adoption for those traditional SaaS companies? Are we seeing any changes in how people are buying SaaS? And that's really where I defied SaaSpocalypse into two different categories, right? Ther...

Why AI Isn’t Killing SaaS Yet

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Why AI Isn’t Killing SaaS Yet

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.