Baker argues SaaS companies are repeating brick-and-mortar retailers' mistake by rejecting AI due to lower margins.
“Well, I think that application SaaS companies are making the exact same mistake that brick and mortar retailers did with e commerce.”
Baker argues SaaS companies are repeating brick-and-mortar retailers' mistake by rejecting lower-margin AI business.
“I think that application SaaS companies are making the exact same mistake that brick and mortar retailers did with e commerce.”
Baker notes AI companies generate cash earlier than SaaS despite lower margins due to fewer employees.
“The crazy thing is because of those efficiency gains, they're generating cash way earlier than SaaS companies did historically, but they're generating cash earlier, not because they have high gross margins, but because they have very few human employees.”
Baker says AI companies generate cash earlier than SaaS despite lower margins because they have very few human employees.
“And it's just tragic to watch all of these companies. Like you want to have an agent, It's never going to succeed.”
Baker says Anthropic added $11B ARR, comparing it to the entire SaaS revolution's $5-10T value creation.
“Anthropic, they added $11,000,000,000 of AR. And what is astonishing to me about this is that the SaaS and cloud revolution it created, we'll call it between 5 and $10,000,000,000,000 of value.”
Baker says Anthropic added $11B ARR in one month, matching what Palantir, Snowflake, and Databricks built in ten years combined.
“And these three companies employ thousands of people, tens of thousands collectively. They've all spent ten years building their businesses and Anthropic added their combined businesses in one month.”