Investors believe AI will replace labor costs instead of just software

Investors are betting that AI will replace labor costs, not software budgets.

"We took a view that AI is not 'enterprise' software in the traditional sense of going after IT budgets: it captures labour spend, at some point you’re taking over human workflows end to end," Sebastian Duesterhoeft, a partner at Lightspeed Venture Partners, told the Financial Times.

This logic underpins the current funding round valuing Anthropic at $350 billion: While classic SaaS solutions compete for limited IT budgets, "agentic AI" systems target the far larger pool of labor costs.

The explosive nature of this shift has already been felt in the markets. A series of developments—including new models, specialized industry tools, and news that Goldman Sachs plans to automate banking roles—collectively helped trigger a sell-off in public markets for traditional software stocks. According to the FT, investors are increasingly realizing that autonomous AI agents could threaten existing business models.