‘AI is making us able to develop software at the speed of light’: Mistral CEO Arthur Mensch thinks 50% of SaaS solutions could be supplanted by AI

More than half of current enterprise software could ultimately be replaced by AI, according to Mistral CEO Arthur Mensch, further fueling concerns about the pending demise of the industry.

In an interview with CNBC, Mensch suggested advances in AI will likely impact the software industry, with enterprises eventually ditching SaaS products in favor of AI.

“I would say more than half of what’s currently being bought by IT in terms of SaaS is going to shift to AI,” he told the broadcaster. “AI is making us able to develop software at the speed of light”.

The potential demise of traditional software is dependent on very specific circumstances, Mensch noted, such as having the “right infrastructure” to be able to plug internal data into AI systems to create dedicated applications.

“We do see with our customers, in a couple of days, we can create full custom applications run a workflow – to run a procurement workflow – or to run supply chain workflows, for instance, in a way where I would say five years ago you could actually need a vertical SaaS,” he told CNBC.

There have been instances over the last two years where firms have dropped software products in favor of bespoke systems of this kind.

In late 2024, Klarna dropped its use of Salesforce and Workday in favor of building an in-house technology stack using AI. As ITPro reported at the time, Salesforce CEO Marc Benioff questioned the move, specifically highlighting issues on “institutional memory”.

Indeed, the current debate over AI supplanting SaaS rests largely on questions about the continuity of “systems of record” – sources of internal business data working in parallel with – and used to feed – AI systems.

Mensch noted that these are “not going to change”, echoing recent comments by Databricks CEO Ali Ghodsi.

Some tech figures aren’t buying the hype

The software market has been mired in a state of turmoil in recent weeks over the potential for AI to replace traditional SaaS products.

Some investors have pointed to tools such as Anthropic Cowork as proof that the technology is reaching the stage where it can supplant dedicated industry solutions.

Cowork offers enterprises dedicated plug-ins aimed at automating tasks across a wide range of domains, such as marketing, sales, and data analytics.

The launch of Cowork and other similar solutions prompted an investor scramble and mass sell-off, yet some big tech figures aren’t buying the hype.

As ITPro reported on 13 February, AWS CEO Matt Garman insisted that “much of the fear is overblown”. While Garman acknowledged that SaaS providers will face disruption in the coming years, many are in prime position to capitalize on this evolution.

“The SaaS providers and the larger players of today have an inside track to winning that business. Now they have to innovate, just like the rest of the world,” he said.

“They can’t stand still. If they stand still, they’re absolutely going to be disrupted.”

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