TLDR Tech / Founders
How AI changes software P&L
Saas used to mean 70% gross margins. AI-native software might cap at 17%. Every AI call is personalized, so caching and multi-tenancy don't reduce your costs. Reasoning models burn 10-100x more tokens than the ones they replaced, so cost per task barely moves even as per-token prices drop. The math: 1 million users at $120 ARPU still leaves you at 17% gross, 11% net. That's consumer goods territory, not Salesforce. Four ways out: 1/10-cost clones (no moat), niche/lifestyle businesses (now viable since build costs collapsed), luxury software (Raya, Bloomberg Terminal), or vertical integration into atoms or services. If your deck still assumes 80% margins because that's what SaaS does, rewrite it this week.
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