If I had to guess about what has changed

from 2021 to 2025

is that most companies have realized

that buying yet another

vertical software solution is not going

to help their business that it typically

adds bloat, it adds cost and it adds

people. And I think starting in 2023,

what people started to guess is at some

point in the near future, you're going

to have some AI way of rewriting all of

this vertical software. And I think

that's why it stopped growing. I don't

think this SAS market ever had the

return on equity that it was supposed

to. And I think so many companies have

woken up from this hangover saying

there's got to be a better way. It can't

always be yet another tool, yet another

program, yet another multi-year delay,

yet another price escalator. And I think

that that the jig is totally up for

software. You're referring to the

Salesforce and the SAS category,

Chimoth, and what you're doing at 8090

specifically. Yeah. Well, it's it's not

just us, but like if you look at anybody

that's rebuilding software,

it is so much easier to rebuild software

from scratch today. Like my team of 30

people can transact hundreds of millions

of dollars of work. Not because we are

so prolifically amazing, but frankly

because well, I think the team is good,

but honestly because the underlying tool

chain gives you a level of leverage. And

so if you rebuild the software

development life cycle using these

tools,

you can't help it but become much more

efficient and you can't help it but

deliver custom solutions that are

meaningfully cheaper. And I think Jason,

if you look at the entirety of the

software that runs the world, we're

going to rebuild it soup to nuts. all of

that and the tool you're referring to

just for the audience is the AI

co-pilots that are making that are

contributing 30 40% to code bases at

Microsoft and less less specifically

that because those are those are good

for individual people but the software

development life cycle is more the

horizontal end to end of making things

got it so what we do internally at 8090

is we have an entire process that starts

from the PRD all the way out to the

functioning code and we use different

techniques at each step but what you get

is a 50 60 70% increase at each step

which then compounds. And so you have

the ability of a team that would

otherwise be able to service tens of

millions of dollars be a team that can

service hundreds of millions and then a

team that would otherwise service

hundreds can service billions. Let me

ask you guys your response to this

theory. If there is going to be this

kind of accelerated

call it custom software rebuild of

business models and you take the S&P

493, do you think that we enter an era

where there is a similar dispersion as

we're talking about seeing in the MAG 7

with the S&P 493 where there are going

to be probably the biggest money-making

opportunities for investors that we've

seen in decades

between those that do adopt and do

rebuild using AI and those that don't

for 100 100%.

I had a call yesterday with one of the

largest private equity funds in the

world, hundreds of billions of dollars

under management and we're doing

something with them at 8090 with one of

their most important assets.

And when you're an owner of a business

and you can direct

specific change

and you can rip out

hundreds of millions of dollars of

software licenses and replace it with

tens of millions of dollars of highly

customized software.

It's an enormous lift to OPEX and

business model quality. So why doesn't

it happen more? The reason it doesn't

happen right now for this S&P 493 is

that the IT organizations inside all

companies

essentially speak a different language

than the CEO, the CFO, and the board. So

if the CEO, CFO, and the board of

directors of the S&P 493 speak English,

the IT organization speaks Mandarin

Chinese, and you get away with saying

all kinds of [ __ ] I'll give you an

example. I went to a CIO conference. one

person that I met an $18 billion a year

IT budget.

What the [ __ ] does that actually even

mean to spend $18 billion a year on it?

I'm not saying that this is a mag seven

company, guys. And when you take that

example and you multiply it by 50 and

100 and 493 examples of people spending

money, there's an entire cartel of

influence that's been built in software

that's going to get undone because

you're not going to be able to justify

it. Free. Absolutely correct. And the

response from the SAS industry is

changing from the per seat model as the

number of employees at these companies

continues to get lowered. Obviously

Microsoft a lot of layoffs. Andy Jasse

talking about layoffs. They're moving

from the per seat model. They're not

taking this uh laying down. Uh they know

that people are going to make custom

software. So what they're doing is

they're moving to a consumption model.

So you're seeing people charge per call,

per customer support call, etc.

And well, it's I'll tell you why it

doesn't work. It's working in

combination. Hold on, hold on, let me

finish. The other thing they're doing is

they're dramatically lowering the number

of people and the developers they have

on their team. And then a lot of what's

happening in the background is the third

piece they're doing is they're starting

to uh do rollups and people are starting

to talk about how can we take you know

20 of these SAS companies lower them

just like you're doing to compete your

thought

playbook. Well, I just wanted to comment

on this like consumption based pricing.

It doesn't work. And what I mean is you

can have some adoption in the short

term. The best example is Snowflake, but

in the long term it destroys your

business. And the reason is because you

don't know which data is valuable and

you're not going to put up with a

variable business model that increases

more and more cost because you need to

trap everything. And so what happens is

all of these other companies develop

around you. People go back to Postpress,

people go to Superbase, they find all of

these ways of saying snowflake makes no

sense. And the reason is because in this

world, nobody's going to pay consumption

because you're like, how do you expect

me to, you know, hold and store and pay

for terabytes and terabytes potentially

a day of data? It's not sustainable.

We'll see if intercom, Salesforce,

HubSpot, and we see if all of those

people start Slack start losing their

customer base or if they lower their

pricing to make it just too easy to keep

those systems in. Thomas, your thoughts?

Yeah, so two quick thoughts. Uh, number

one, Chimath, to put a kind of a

mathematical frame on this, right? We

know that Anthropic is kind of the level

zero of code generation. They're they're

doing incredibly well powering companies

like Cursor, right? I think and this is

order of magnitude correct that

Enthropic in Q1 added 70% of the net new

ARR in the SAS industry right defined by

public SAS companies right so let's just

think that the company in AI that is

most powering the disruption of SAS

added 3/4 of the net new of the entire

industry right so that's kind of point

number one I think Freedberg point

number two I think what we're seeing in

the Max 7 right where we're starting to

have debates about who's well positioned

and who isn't who's going to win and who

isn't right is actually as it was in the

past 5 years going to be a broader lens

into the S&P 493 I think inside of

boardrooms inside of every investment

committee you're going to see the exact

same conversations that we've been

having about the MAX 7 right who who's

well positioned who can win what are the

management teams maybe like Zuck that

are being aggressive and bold and

capturing the opportunity and which are

the ones that are not so for me as a

stock picker right I think over the next

five years.