In an era of vibe-coding, words still have some meaning. Or at least, they do when they’re harbingers of doom, foretelling a world of mass unemployment and economic ruin. Just over a week ago, a Substack essay by the investment research firm Citrini Research went viral on social media, sparking a market plunge based on its prediction of near-term, AI-spurred financial collapse.
Citrini was far from the only voice prophesying such a pessimistic future. As Allie recently wrote about, public markets have been spooked for weeks by the so-called SaaS-pocalypse, where valuable software companies like Salesforce, Adobe, and Workday see their moats eroded by AI agents. And even beyond the individual companies themselves, there are well-founded concerns that private equity funds have become over-indexed in flimsy software stakes that could trigger a wider collapse.
Other established analysts have pushed back against Citrini’s fear-mongering, which one Fortune editor described as “a highly speculative piece of financial fiction.” That includes Citadel, whose Frank Flight pointed out that demand for software engineers is rising rapidly and that white-collar jobs are unlikely to be replaced by agents anytime soon due to the cost and availability of compute.
Still, I was curious how top venture capitalists—the only type of professional investors likely more exposed to software than private equity firms—were feeling about their portfolios. Last week, I had the chance to catch up with Sequoia partner, and new co-steward, Alfred Lin. He recently co-led the Series A for a financial AI platform called Rowspace, which allows investment operations like private equity firms to sift through years of their own complex data. Rowspace’s pitch is not unlike what Claude Cowork purports to do, but Lin said that he wasn’t worried about the inevitable challenge from the Anthropics of the world.
“The notion that SaaS is dead, I think, is overblown,” he told me. “This whole notion that foundation models are going to take over and everything will only work on the foundation model—it’s not quite how things work.”
Lin brought up a historical analog. When personal computers first came out, users had to use command-line interfaces to execute applications. Then, of course, came along graphical user interfaces, which allowed users to more easily interact with programs. “People want simple,” he said. “They want to do things a particular way or certain way, and the foundation model is not going to be able to cater to every single way that someone wants to do [something] in all these different industries.”
Aside from all of the other obvious moats, from network effects to data security, Lin said the biggest advantage for founders today is being willing to be AI native and to move faster than competitors. “The proliferation of vertical SaaS has been a profitable way to invest,” he put simply. “I think there will be a proliferation of vertical AI companies too.”
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