AI-Powered Apps Threaten Traditional SaaS Providers

A recent surge in AI company valuations has led to concerns that SaaS providers like Salesforce and ServiceNow may be replaced by vibe-coded apps.

The valuation of privately-held AI company Anthropic increased by over 400% between late 2024 and mid-2026, while the market valuations of leading SaaS companies have declined. The stock prices of Salesforce and ServiceNow have fallen by about 40% from their peaks in December 2024.

The CEO of ServiceNow has dismissed concerns that AI will replace SaaS functionality, but experts argue that AI could make employees more efficient, reducing the need for SaaS subscriptions.

Many businesses are already moving away from SaaS platforms, with some using AI to create custom apps that work exactly as they want them to. For example, David Finberg's company built a no-frills reporting tool that saves around $200 per month, while Aaron Beashel created his own customer support app that connects to their help inbox and drafts replies with links to support articles.