Marc Andreessen's 2011 prediction that "software is eating the world" has come true in an unexpected way. AI is now consuming software itself, triggering a $1 trillion selloff dubbed the "SaaSpocalypse." Morgan Stanley analysts report a 33% drop in software equity multiples as the industry faces disruption from the very technology it helped create.

The market collapse stems from three primary concerns: generative AI automating labor, the rise of DIY software creation, and model providers rendering traditional applications obsolete. These fears challenge the software business model at its core, as companies may need fewer subscriptions if AI allows them to cut staff in half through automation.

Despite the turmoil, established players like Microsoft, Salesforce, and ServiceNow are positioning themselves as "fast followers" by integrating AI. Salesforce's AI-related revenue surged 114% year-over-year, proving adaptation is possible. Andreessen's firm argues we need vastly more software, not less, as AI changes what we build but not how much needs to be built.