I think when all is said and done, AI will be more disruptive to services than software. The days of paying lawyers $1,500 are coming to an end soon (caveat at bottom of post). Same thing with paying a brand designer $150,000 to generate logos and branding schemes. I think the mental model is to think of the LLM as the agency. Critically, you still need someone to manage the agency in the same way if you hire an external branding agency, you need an internal creative to manage the relationship. What LLMs do is actually make services scalable by removing humans from the equation, BUT it will also reduce the price you can charge by 95%. Here's why I think this is actually not bearish for software. Most software companies DO have a services component, they just don't prioritize it because it doesn't scale. Well, now it does. I think what we're going to see is the birth of "smart software" (h/t @smyyguy ), where a previously separate and expensive service is combined into the offering at a massively reduced price. So what does the future look like? Instead of paying for Quickbooks and then hiring an external accountant, you buy Quickbooks and for an extra $500 a month they include an agent. When you buy investor relations software, it comes with your very own IR advisor (no more paying $50,000 a month to help with the story). Ultimately, the moat for software doesn't change. It's still about brand, distribution, and integrations. ...