In a recent LinkedIn post, Linas Beliūnas analyzes the current market sentiment surrounding software stocks, particularly in light of advancements in Artificial Intelligence. Beliūnas challenges the prevailing narrative that AI spells the demise of software companies, instead arguing that the market is misinterpreting the relationship between AI and the existing software infrastructure.
He highlights comments from NVIDIA co-founder and CEO Jensen Huang, who suggests that the market’s fear is misplaced. According to Huang, the idea of AI replacing software companies is fundamentally flawed.
“The notion that AI is somehow going to replace software companies is the most illogical thing in the world and time will prove itself”.
Beliūnas elaborates on this perspective, explaining that AI acts as a tool that leverages existing software rather than replacing it. He uses the analogy of AI agents being the new workers and SaaS platforms serving as the essential factory floor.
AI as a Tool, Not a Replacement
Linas Beliūnas points out that enterprise AI agents are dependent on foundational software components. These include APIs, databases, and security layers, which are critical for their operation. As he notes:
“Enterprise AI agents rely on APIs, databases, and security layers. They don’t rebuild Salesforce from scratch.”
This dependency, Beliūnas argues, ensures the continued relevance and growth of established software providers. He cites ServiceNow as an example, noting its continued growth of over 20% while actively integrating AI capabilities across its product suite. Furthermore, Beliūnas mentions the significant capital expenditures by hyperscalers, largely directed towards supporting AI workloads, underscoring the infrastructure demands driven by AI.
Market Mispricing and the Future of SaaS
Beliūnas suggests that the current market downturn in software stocks, attributed to AI fears, is a mispricing event. He contends that Wall Street is anticipating the obsolescence of Software as a Service (SaaS) when, in reality, AI is more likely to disrupt intermediaries.
The Sorting Mechanism of AI
While acknowledging that some parts of the SaaS market may face pressure, Beliūnas clarifies his stance. He concedes that companies with low moats might be squeezed and that pricing models may shift towards usage-based structures. However, he emphasizes the net positive impact on the broader software ecosystem.
“Yes, low-moat SaaS gets squeezed. Yes, pricing shifts toward usage. But more code, more automation, more agents = more infrastructure, more compliance, more integration.”
In Beliūnas’s view, the increased adoption of AI will lead to more complex software development, greater automation, and a proliferation of AI agents. This, in turn, drives demand for underlying infrastructure, enhances the need for compliance solutions, and necessitates more sophisticated integration services. He concludes that AI is not the end of SaaS but rather a powerful sorting mechanism that will refine the industry, emphasizing the continued importance of robust software foundations.
📝 About This Content
This article is based on insights shared by Linas Beliūnas on LinkedIn.
📅 Originally posted on February 10, 2026 | View original post on LinkedIn →