Uncapped with Jack Altman
· Jack Altman, Bret Taylor
[00:00:00] S0: Bret, thanks a bunch for doing this with me. I’m super excited for it. [00:00:00] S1: Thanks for having me. [00:00:00] S0: You’re one of the best people to ask this following question. What is your view on the SaaS-pocalypse, if we can call it that? [00:00:00] S1: SaaS-mageddon. [00:00:00] S0: SaaS-mageddon. In public markets, all of these companies are trading way down. You go on X and everybody’s talking about how software can now be written in two seconds so there’s no moats anymore in software. It’s leading a lot of people to ask, where does durability come from? I wanted to start with this topic because you’ve built your own companies, you’ve been the co-CEO at Salesforce, you’re now building one of the fastest growing AI startups, and you’re on the board of OpenAI. How do you see software in this moment, in February 2026?
· Jack Altman, Bret Taylor
[00:00:00] S0: SaaS-mageddon. In public markets, all of these companies are trading way down. You go on X and everybody’s talking about how software can now be written in two seconds so there’s no moats anymore in software. It’s leading a lot of people to ask, where does durability come from? I wanted to start with this topic because you’ve built your own companies, you’ve been the co-CEO at Salesforce, you’re now building one of the fastest growing AI startups, and you’re on the board of OpenAI. How do you see software in this moment, in February 2026? [00:00:00] S1: First, I don’t think the market is necessarily reflecting an indictment of individual companies. It’s more of a broad view of these bigger questions you were saying. Every software stock is down, but I don’t think that means every software company is equally disadvantaged. It’s basically just anxiety about the future. It’s a few things. We can talk about defensibility broadly, it’s a really interesting question. If you look at the history of enterprise software, a lot of the value has gone to the big systems of record: ERP systems, CRM systems, the core databases that Oracle famously powered in the early days of software. Then you end up with all the software-as-a-service companies: SAP, Workday, Salesforce, ServiceNow. If you look at what a system of record is, it’s essentially a database with a bunch of workflows around it. To date, those workflows are manipulated by people clicking on buttons in a web browser, filling out forms.
· Bret Taylor, Jack Altman
[00:00:00] S1: First, I don’t think the market is necessarily reflecting an indictment of individual companies. It’s more of a broad view of these bigger questions you were saying. Every software stock is down, but I don’t think that means every software company is equally disadvantaged. It’s basically just anxiety about the future. It’s a few things. We can talk about defensibility broadly, it’s a really interesting question. If you look at the history of enterprise software, a lot of the value has gone to the big systems of record: ERP systems, CRM systems, the core databases that Oracle famously powered in the early days of software. Then you end up with all the software-as-a-service companies: SAP, Workday, Salesforce, ServiceNow. If you look at what a system of record is, it’s essentially a database with a bunch of workflows around it. To date, those workflows are manipulated by people clicking on buttons in a web browser, filling out forms. [00:00:00] S0: If you had to synthesize pre-AI, why were those businesses so good? Was it the source-of-truth thing? That there had to be some immutable thing, so the database row… Is that what it was? Was it the ecosystem of integrations? What do you attribute the success of systems of record to?
· Bret Taylor, Jack Altman
[00:00:00] S1: The reason why a system of record has always been the most valuable is that it’s the anchor tenant of your technology deployments. If you wanted to create a workflow for quote-to-cash or something like that, you had to integrate with your ERP system and your CRM system. As a consequence, the companies that owned those databases could either develop that functionality as an add-on, a new SKU. Or if it was a third-party company, they would often be a part of the ecosystem, like Salesforce’s AppExchange or whatever the marketplace equivalent is for SAP. You ended up with a lot of value in those systems, which meant switching costs were really high because that system plus all the partners that integrated with it created gravity and high switching costs. Similarly you end up accruing a lot of value either by collecting rent from your ecosystem or developing premium add-ons on top. It became the sun in the solar system for each of the different lines of business that these systems of record were sold into. Then you’d get scale, sales capacity scale. The larger you grow, the more salespeople you have, you can reach more and more people. Then there’s the proverb: “No one gets fired for buying IBM,” which obviously is a somewhat dated expression. But it was like, “Hey, if you’re going to put in a new ERP system, no one’s going to blame you for choosing SAP because everyone chose SAP.” [00:00:00] S0: If you choose something new and it doesn’t work perfectly, big trouble.
· Jack Altman, Bret Taylor
[00:00:00] S0: If you choose something new and it doesn’t work perfectly, big trouble. [00:00:00] S1: So all those things accrue. But then the question is, now that a lot of those things start getting chipped away with AI agents… First, could you just vibe code it in a weekend? Does it change build versus buy? That’s one risk. Does it change when you come up on that renewal? Are you going to make a different decision? Secondly, I actually think the more fundamental thing is: what is the role of that system of record if AI agents are doing most of the work? Rather than people clicking around on an ERP system to onboard a vendor, if you just delegate to an AI agent to do it, all of that is invisible to you. All of a sudden it goes from being an application to a database. Similarly, if you imagine a CRM system, and rather than having people staring at it all day to manage their leads, contacts, and opportunities, you just say, “Hey, generate me some leads.” [00:00:00] S0: In other words, does a system of record have a place in the world if nobody logs into it?
· Bret Taylor
[00:00:00] S1: It does, but the real question is how valuable is it? How important is it? Going back to my metaphor of a solar system, how important is that gravity versus the gravity of the agents running around it? It’s just really interesting. If you imagine you’re running a sales team, how much do you value the database of leads versus the agent that generates the leads? In ancient history—three years ago—those are the same thing. But now you’re like, “Gosh, I actually probably care more about the lead generation. How it’s stored and tracked is maybe a more tactical part of it.” That’s true of every system of record. I just know CRM systems pretty well. If you look at ITSM, which is what ServiceNow plays in, or ERP systems, which is Workday, SAP, Oracle, et cetera, all these questions start coming up. What’s interesting though is I think every single one of those companies could transform and benefit from AI. I really do believe that. You saw what Microsoft did in the cloud transformation. They went from being dependent on Windows revenue to Active Directory and Azure and all those other things. But it was really awkward. Folks like you and me back in the day used to probably dismiss Microsoft. I certainly did. I didn’t foresee them becoming as powerful as they are today. But it was good leadership, good technology. But I don’t think the market knows who is Siebel Systems and who is Microsoft in this landscape of software companies. Probably no one knows what Siebel Systems was. That was the company that Salesforce beat to become the cloud CRM. So can you actually develop this ecosystem of agents around your platform and will it become more valuable than the platform you had? On top of it, you have the existential risk of, is the value of software just going to zero? I don’t necessarily believe that. But you look at all of that, and if you’re just an investor in public markets, you’re like, “I’m going to sit on the sidelines. I’m going to let the market play out a little bit.” I think that’s what’s going on with a lot of these.