“Software is devouring the world,” declared Marc Andreessen in 2011 in a famous quote. “AI devours software,” Sam Altman, Elon Musk and Jensen Huang now respond.
If the project sounds like a joke, it is clearly not one. With Macrohard (a joke on the name Microsoft), Elon Musk intends to hunt in software lands through his company xAI, which is behind the Grok chatbot.
The objective: to use its mastery of large language models to generate software entirely using AI. Like Microsoft, it will rely on the sale of licenses to generate revenue, and will be able to count on the power of Colossus, a supercomputer currently under construction in Memphis which, once completed, will be the most powerful in the world.
OpenAI dreams of itself as a universal interface
Like Elon Musk’s company, several AI giants are seeking to transform, or even replace, the creation of software to generate new revenue channels. The most ambitious in this area is undoubtedly OpenAI. At the beginning of October, during his developers conference, Sam Altman presented a new feature allowing third-party applications to be integrated so that they run directly in ChatGPT. This feature would ultimately allow users to launch a Spotify playlist, do graphic design via Canva software or even search for an apartment on Zillow without leaving the chatbot. ChatGPT would thus become an ecosystem to which all kinds of applications could connect.
The company plans to go even further by offering its own web browser, Atlas, which this time will come to hunt on the lands of Google Chrome, with the ambition of transforming the way we surf the web. “AI represents a rare opportunity to rethink what a browser can be,” Sam Altman said during the announcement. The browser is notably distinguished from Chrome and its competitors like Firefox and Safari by a button which allows you to open a sidebar to chat with ChatGPT in order to refine and streamline the search. The chatbot also includes an “agent mode”, still in the experimental phase and currently only accessible to paying users, which allows you to leave the controls to the chatbot, by asking it, for example, to design a playlist, to find a restaurant and reserve a table there, or even to book train tickets and hotel nights for a trip.
In its ambition to win the battle of browsers, OpenAI will however not only have to beat the historic big names (starting with Chrome, very much in the lead with 72% market share), but also its AI rivals who are also launching into this battle. Let us mention in particular the young start-up Perplexity, which launched its Comet browser at the beginning of July, which also includes an assistant function.
On Wall Street, AI picks up software’s pockets
The numbers point to a worrying trend for software professionals. In the first half of 2024, AI startups raised $116 billion worldwide, surpassing the already very good figures for 2024 (104 billion). Software start-ups are struggling to raise funds. And where the big names in AI are gathering record funding or doing well on the stock market, those in software are experiencing lean times. Salesforce stock has lost a quarter of its value since the start of the year, while Adobe and Atlassian have fallen 20 and 30%, respectively.
“Software company valuations are being pressured by the narrative that AI is killing software, which contributes to short-term market volatility,” notes Matthew Heldberg, an expert specializing in the software market, in a note dated August 12. “AI takes precedence over software,” says Dan Ives, technology expert at Wedbush. “Adobe and Salesforce, among others, underestimated how quickly the AI revolution would eat into their market share.” Emblematic of this trend, the young company Klarna, which entered the stock market at the beginning of September, which replaced certain functionalities formerly provided by Salesforce with generative AI.
AI, a revolution in three stages
AI companies are certainly not going to replace the software giants overnight. The SaaS industry remains bigger than ever and is expected to continue to grow rapidly, particularly thanks to the rise of the cloud. Additionally, from databases to cybersecurity to infrastructure, many software functions remain essential and are not yet on the verge of being replaced by AI. But this is already helping to transform the industry, by giving it three main changes.
- First, where traditional software functions require human intervention, AI allows greater automation, through agents capable of carrying out complete multi-step tasks in a completely autonomous manner.
- Next, AI introduces natural language as the default interface in interacting with the software, removing the necessary technical barriers — mastery of languages like SQL, Python, etc.
- Finally, AI, by writing lines of code itself, makes it possible to democratize the creation of new software products, transferring value from the creation of software itself to the control of data.
“People who have limited technological skills will soon be able to generate their own application without having to write a line of Python, React or JavaScript. We will thus be able to create interactive and very powerful applications with simple prompts, then modify and improve them. This is very scary for big software companies, because the new standard will be to be able to generate your own experience”, confides Benoît Dageville, president of products at Snowflake.
Resurrecting the old dream of the super app
For AI giants, this is naturally a great opportunity to generate new revenue channels to offset the huge investments in infrastructure needed to stay in the race. For example, developers could have the option of paying to rank high on AI chatbots. UberEats could thus pay a commission to OpenAI so that, when a user asks ChatGPT to have a pizza delivered, the chatbot goes through UberEats rather than a competing service.
During his developer conference, Sam Altman warned that OpenAI would soon launch new options to allow developers to monetize their applications via ChatGPT, by allowing users to make purchases directly through the chatbot, this via “an agentic commerce protocol”.
The objective seems to be to ensure that OpenAI’s chatbot becomes the new default mode of using the web, bridging the web and mobile and fulfilling the old dream of creating a super app modeled on the Chinese WeChat in the West. This is what Elon Musk said he wanted to do when he bought Twitter. Uber has also displayed the same ambitions. But until now, these have come up against the fact that, unlike the Chinese ecosystem, that of the West was not built first on mobile. The entire history of the web and the habits of Western Internet users, which were built on computers, have created habits and frictions that have always stood in the way of the ambitions of those who dreamed of a great app. The rise of AI now offers them a new window of opportunity.
