Databricks CEO: AI won't kill SaaS, but will make it irrelevant

# AI Won't Kill SaaS, but Will Make It Irrelevant — And Here's Why That Makes Sense

Cloud software won't disappear. But its reign is ending. That's the forecast from Ali Ghodsi, CEO of Databricks, and his logic deserves attention in an era when every startup rushes to wrap existing software in a layer of artificial intelligence. Ghodsi rejects the popular narrative that powerful language models will simply "remake" traditional SaaS applications on the fly. Reality will be far more interesting — and more dangerous for current monopolists.

The essence of his vision is simple but destructive: a new generation of companies won't slap AI onto ready-made products like Salesforce or Workday. Instead, they'll build software from scratch, with artificial intelligence embedded in the foundation of the architecture. This isn't the same as adding a chatbot to the side of an application. It means rethinking the very logic of how people interact with enterprise software. When AI is built into the DNA of a product, not glued on top, everything changes: speed, interface intuitiveness, automation capability, price. Old players, burdened by the legacy of the previous decade, will prove too sluggish in this race.

The history of technology knows many examples of such upheaval. When the web emerged, companies tried to simply port their desktop applications to a browser — the result was clunky. Those who started from scratch (Google Docs instead of MS Office in the cloud) won. The same story is repeating now, at a higher level. Companies like Notion or Linear already demonstrate how simple, elegant AI assistants integrate into work better than complex systems created two decades ago. Databricks, by the way, positions itself as a platform where it's convenient to build exactly such new products.

It's important to understand that Ghodsi isn't talking about the literal death of the SaaS model. Cloud software will remain cloud-based. Subscriptions will continue to exist. The question is different: who will own this space? Today, the cloud is dominated by companies founded in the 2000s, when AI was exotic. They've already invested billions in infrastructure, contracts, reputation. But if AI truly changes the rules of the game, the power of these assets loses significance. A young startup with the right architecture, trained on current models, could prove more useful than the giant legacy of Microsoft or Oracle.

This creates a window of opportunity for new companies and danger for the established order. Uber didn't kill taxis; it redefined the market and captured its dominant share. AI could do the same with SaaS, but faster. Not through direct replacement, but through fresh competitors who will show that enterprise software can be more intuitive, efficient, and cheaper if redesigned with machine learning capabilities in mind.

For the industry, this means a forthcoming revaluation: those who successfully navigate the transformation will survive, but many laggards will face customer migration. For us, users, this is good news. Competition always pressures prices and raises quality. Cloud software won't go away, but who creates it and how it works will look completely different.