The Great Displacement

Agentic AI is beginning to reshape the economics and operating models of enterprise software – a theme that was discussed repeatedly at the UBS Venture Capital Summit.

What began as a tool for incremental efficiency has evolved into a catalyst for structural change, becoming a system capable of performing discrete units of work with implications for pricing, hiring, and transforming the enterprise technology stack.

With insights from leading venture capital firms and institutional investors, the summit offered a unique perspective on how this transformation is unfolding across capital markets.

The shift to agentic AI is forcing investors to rethink legacy software exposure. If AI compresses labor and licenses, it fundamentally challenges the durability of traditional Software as a Service (SaaS) revenue models.

Karl Keirstead, Software Equity Research Analyst, UBS
 

For more than two decades, enterprise software scaled predictably with headcount. More employees meant more licenses and recurring revenue. That relationship is now under pressure as AI systems assume a growing share of work across software engineering, customer support, and sales development.

When tectonic shifts hit an industry at scale, leading large, legacy enterprises through this change becomes extraordinarily difficult. It’s the Innovator’s Dilemma in real time: companies are trying to defend their existing business while, at the same time, the very way software is created is changing. 

Brad Gerstner, Founder and CEO of Altimeter Capital
 

Panelists noted that many public SaaS firms may need to revisit pricing models, restructure teams, and rethink go-to-market strategies. They expect that the firms that survive will likely abandon seat-based economics in favor of usage, workflow, or outcome-based models. Some companies are already experimenting with pricing tied directly to measurable outcomes rather than the number of users.

As pricing models are shifting, so is the nature of technical work itself. Coding is no longer a specialized skill set confined to engineering teams; it is becoming the interface through which AI systems perform knowledge work.

Additionally, AI systems are no longer simply assisting developers. They are writing, modifying, and deploying code across production environments. 

As these AI systems take on more coding responsibility, the human role is shifting from one of author to supervisor, with developers increasingly guiding, validating, and orchestrating AI agents.

This shift is also changing workforce dynamics, increasing demand for security and compliance oversight while compressing some entry-level engineering roles. 

A lot of global 2,000 brands will meaningfully shift and change their way of work through agentic AI, and I think fundamentally that will create a lot of opportunity for new investments that are durable and can grow and scale in an exciting way. 

Murali Joshi, General Partner, ICONIQ
 

For the AI-native software companies, panelists emphasized that model intelligence alone will not create a durable advantage for enterprise adoption. AI systems generate real enterprise value only when grounded in proprietary data such as emails, CRM systems, operational logs, transaction records, and workflow data.

Despite its importance, enterprise adoption remains in relatively early stages reflecting the complexity of integrating AI into live data environments. Panelists noted that durable advantage is expected to favor companies that control how critical data is generated, stored, and operationalized, shifting competition toward integration, data architecture, and governance.

The key takeaway from this year’s summit was that AI is moving from tool to worker. From writing code to supporting customers and managing routine workflows, these changes are prompting organizations to reassess pricing models, hiring strategies, and their technology infrastructure.

This shift represents more than a technology upgrade; it marks a change in how work gets done. Companies that adapt to this reality will be best positioned to shape the next chapter of enterprise technology.