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The $939B Question: Is AI Eating SaaS or Feeding It?

By Jason Lemkin
Friday, June 20, 2025 | Artificial Intelligence (AI), SaaStr.Ai

The $939B Question: Is AI Eating SaaS or Feeding It?

We’re witnessing the most dramatic shift in enterprise tech spending since the cloud migration began 15 years ago. And if you’re a B2B leader, founder, or investor, you need to understand what’s happening — because it’s about to reshape your entire world.

The numbers are staggering: AI spending is set to hit $644 billion in 2025, growing at a mind-bending 76.4% year-over-year. Meanwhile, SaaS — our tried-and-true darling — is projected at $295 billion with a “mere” 18.4% CAGR.

IS AI EATING SAAS?

SaaStr AI is Heading to London, 2-3 December!

Get ready because this December, we’re bringing the best of SaaStr AI 2025 across the pond to London!

On 2-3 December, join 2,500+ SaaS and AI leaders, founders, and investors for two action-packed days of learning, networking, and scaling.

We’re taking everything that made this May’s SaaStr Annual unforgettable: the groundbreaking AI insights, tactical SaaS playbooks, and unmatched networking, and delivering it to the heart of Europe.

Here’s what you can expect:

The SaaStr AI Summit Comes to London: Dive into the intersection of AI and SaaS with sessions from the leaders actually building the future of B2B.

World-Class Speakers: Learn from the CEOs, CROs, and product visionaries behind the fastest-growing SaaS and AI companies.

Unparalleled Networking: 1,000+ networking sessions, meetings, and opportunities to connect with the best in SaaS + AI

VC Access: Meet 500+ VCs and investors ready to fund the next wave of innovation.

Whether you’re a founder scaling to $100M+, an exec driving growth, or an investor looking for the next AI-first unicorn, SaaStr London is where you need to be.

Tickets just went on sale. Register here to take advantage of launch pricing.

WE'RE GOING TO LONDON

The $4.5B Board Meeting: Inside Snowflake’s AI Transformation and the CEO Who Bets His Company on Their Platform

By Jason Lemkin
Friday, June 20, 2025 | Artificial Intelligence (AI), SaaStr.Ai

Top 5 Takeaways

Consumption Revenue Recognition Changes Everything: Unlike traditional SaaS, Snowflake can’t recognize revenue ratably—they only book revenue when customers actually consume credits, even with multi-year contracts. This creates hyper-aligned incentives where sales success is measured by use case creation, not deal size.
Technical Sales is Now Table Stakes: Enterprise sales reps must understand technology applications deeply enough to have credible conversations with both business executives and technical teams. The days of relationship-only selling are over in AI-adjacent markets.
Separate Teams for Land vs. Expand: Snowflake completely separates new customer acquisition from account growth teams. Growing a $50M account requires managing 20+ people and knowing customer architecture better than the customer—a fundamentally different skill than closing new deals.
Strategic Partnerships Need Internal Champions: Real partnerships only exist when someone’s career depends on your success. Without an internal champion whose future is tied to yours, you’re just a vendor getting lip service.
AI Will Reshape Technical Roles in 18 Months (or Less): Data engineers will become orchestrators rather than code writers. Data analysts will shift from writing SQL to providing semantic context. The next 18 months will bring more change than the previous four years.

INSIDE SNOWFLAKE'S AI TRANSFORMATION

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The Top 3 Reasons AI Sales Tools “Don’t Work” (Spoiler: They Actually Do)

By Jason Lemkin
Wednesday, June 20, 2025 | Artificial Intelligence (AI), SaaStr.Ai

The Top 3 Reasons AI Sales Tools “Don’t Work” (Spoiler: They Actually Do)

I get this question at least 3x a week: “Jason, we tried AI sales tools and they just don’t work. What are we doing wrong?”

The short answer? Almost everything.

I’ve been in B2B and Saa sales for 15+ years. I’ve seen every “revolutionary” tool come and go. And here’s what I’ve learned about AI sales tools after implementing them ourselves and win dozens of portfolio companies: They work incredibly well… if you actually do the work.

But most teams don’t. They want magic. They want to flip a switch and suddenly have AI SDRs booking 50 meetings a week with zero effort. They want an AI SDR to basically close deals itself, on autopilot.

That’s not how this works. That’s not how ANY of this works.

Here are the top 3 reasons your AI sales tools are “failing” (and how to actually make them work).

TOP 3 REASONS

ChatGPT Is Becoming the Ultimate Mega-App: And It’s Already Starting To Eat B2B Software

By Jason Lemkin
Tuesday, June 17, 2025 | Artificial Intelligence (AI), SaaStr.Ai

ChatGPT Is Becoming the Ultimate Mega-App: And It’s Already Starting To Eat B2B Software

The idea that ChatGPT could become a mega-SaaS app seemed fanciful just months ago.

But things change so fast in AI. Fast forward today and it’s easy to see it becoming the front-end to most B2B apps—and supplanting many at a practical level, even if in many cases almost by accident.

The B2B world is experiencing its own version of this dynamic. Except instead of two egos competing for attention, it’s one AI platform systematically absorbing the functionality of entire categories of business software.

CHATGPT IS THE ULTIMATE MEGA-APP

This edition of the SaaStr Daily is sponsored in part by Prismatic

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HERE'S WHAT YOU NEED

A16Z: Enterprise AI Spending is Growing 75% a Year.

By Jason Lemkin
Monday, June 16, 2025 | Artificial Intelligence (AI), SaaStr.Ai

a16Z recently surveyed over 100 leading CIOs across 15+ industries to get the latest pulse on enterprise AI spend in software. The learnings aren’t a surprise — but they are useful to see just how core AI spend has become in the enterprise.

It’s not just part of the innovation budget anymore.

Top 5 SaaStr Learnings: Enterprise AI in 2025:

1. AI Budgets Are Exploding—And Moving to Core IT Spend

The Hard Data: Enterprise AI spend is growing 75% year-over-year, with innovation budget allocation dropping from 25% to just 7% of total AI spend. One CIO reported: “what I spent in 2023 I now spend in a week.”

The Money Shift: AI has officially graduated from pilot programs to permanent budget line items in core IT and business units. This represents a fundamental shift from experimental dollars to recurring revenue opportunity.

The B2B Reality: You’re no longer selling to innovation teams with small budgets—you’re competing for the same enterprise IT dollars as traditional software, which means enterprise sales cycles, security requirements, and procurement rigor are now table stakes.

2. Multi-Model Deployment Is Crushing Single-Vendor Strategies

The Hard Data: 37% of enterprises now use 5+ models in production (up from 29% last year). OpenAI maintains overall market leadership, but the breakdown is telling: 67% of OpenAI users deploy non-frontier models vs. only 41% for Google and 27% for Anthropic.

The Price War: Google’s Gemini 2.5 Flash costs $0.26/million tokens vs. GPT-4.1 mini at $0.70/million tokens—a 63% cost advantage that’s driving enterprise adoption.

The B2B Reality: Enterprise customers expect you to intelligently route between models based on use case and cost. Your differentiation isn’t which model you use—it’s how smartly you orchestrate multiple models to optimize performance and cost.

AI SPENDING IS GROWING 75%

AI is Already Increasing Our Cognitive Load. That’s Only Going to Increase — Dramatically.

By Jason Lemkin
Tuesday, June 17, 2025 | Artificial Intelligence (AI), SaaStr.Ai

AI is Already Increasing Our Cognitive Load. That’s Only Going to Increase — Dramatically.

So I love our SaaStr AI. It’s already enabled us to:

Dramatically improve our content
Review 200+ pitches for SaaStr Fund
Review 700+ content submissions for SaaStr Annual
Review 150+ sessions for SaaStr Annual
And so much more. It’s great.

But because we can now do so much more with AI … we also have to process all that output. It’s so, so much more to process than just 9 months ago.

WHAT'S NEXT

MCP and The Fight Over Whose Data it is: The Coming Enterprise Software Revolt

By Jason Lemkin
Sunday, June 15, 2025 | Artificial Intelligence (AI), SaaStr.Ai

MCP and The Fight Over Whose Data it is: The Coming Enterprise Software Revolt

The walls are closing in on data silos. The rise of ChatGPT as the front-end to our AI world is pushing them to open. And legacy B2B and SaaS vendors are about to learn a painful lesson about who really owns customer data. Albeit not without some battles.

Fight it like Salesforce + Slack? Or embrace is like HubSpot?

The Salesforce-Slack Moment That Changes Everything.

Salesforce just fired the first shot in what will become the defining battle of enterprise software’s next decade. By blocking AI rivals like Glean from accessing Slack data, they’ve crystallized the central question every SaaS vendor will face: Is the data in your app YOUR data, or your customer’s data?

THE COMING REVOLT

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