causal

Software-as-a-service underperformed due to AI COGS

SaaS companies have historically had very low incremental cost per user (high R&D and customer acquisition costs but cheap to serve), but the high COGS of AI completely breaks these business models, which is why SaaS companies (excluding Microsoft) have underperformed in the markets.

causalpending

Speaker

Dylan Patel

Evidence Quote

the COGS of AI is just so high, and that just completely breaks how these business models work.

Source

Satya Nadella — How Microsoft is preparing for AGIDwarkesh Patel Podcast
Created: 6/13/2026, 3:35:54 AM

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