> Now consider what the same analyst does with an LLM agent:
"Show me all software companies with over $1B market cap, P/E under 30, and revenue growing over 20% year over year. Build a DCF model for the top 5. Run sensitivity analysis on discount rate and terminal growth."
While I think LLMs can improve the interface and help users learn/generate domain specific languages, I don’t see how a professional can trust an llm to get a technical request like this correct without verification. Wouldn’t a financial professional trust the Bloomberg llm agent that translates their request into a set of Bloomberg commands more?
Real financial analysts already have DCF spreadsheets where they can just plug in numbers for any company. An LLM can help with fine tuning or catching errors but it's not a game changer.
It’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me.
SaaS stocks are currently the buying opportunity of a lifetime.
Anecdotally, my partner does experience design for fintech systems akin to Bloomberg for a particular niche. They do the standard lifecycle of user research, design iteration in figma, handoffs to devs and all that. The tech department at this company has also been building OpenAI integrations for more than 2 years and are neck deep in LLM technology doing exactly what this thread describes. My partner is still doing exactly the same work she's been doing the entire time and getting the same level of adoption for all the bespoke UI development while the chat interface is just kinda there. I'm sure it's getting usage for some tasks, but it's supplemental.
Also, has nobody thought about operations? I pay SaaS companies so I don't need to think about operations. It is insane to me to think that people think a restaurant company is going to suddenly want to get into managing the operations of its vibe coded accounting app. Absolutely not.
There's enough unhappiness with commercial SaaS EHRs that I expect as few health system CIOs will decide to operate their own vibe coded replacements. This won't work out well for most of them but I think it's going to happen.
Yes, I’m very aligned with “minimal dependencies, live off the land, roll your own” to avoid lock-in and vendor bullshit. Shit I’d rather rent baremetal from Hetzner than VPS from EC2/GCP/etc if I have enough workload to justify it.
But for my startup I still use a ton of SaaS services for things that I could probably do just fine myself. (Clerk/StackAuth, Supabase/PlanetScale, Cloudflare STUN/TURN, Clickhouse, Vercel, Calendly, Google Workspace, ngrok, Tailscale).
Spiritually, I hate using these. Any one of these would be dead-simple to replace. But my time is genuinely better spent on my startup’s particular value-add. Maybe I’ll replace these some day when we can hire someone to manage internal replacement services - some of which are as easy as “a postgres database” or “wireguard on some VPS instances”. But it’s just not worth my time right now when I’m focused on building revenue.
Even if they all cost $300/mo in total, and we’re bootstrapped, it’s a lot easier to cut back on UberEats or shiny nerdy toys than it is to replace all of these SaaS offerings. I recognize there’s a lot of ”I don’t know what I don’t know” and I’m liable to subtly misconfigure something in a potentially disastrous way.
The bottom of the market fell out because of political turmoil. The U.S just revised job numbers down by a million for the first time in decades. The author’s thesis about the future of software businesses could be right or wrong but it is not the cause of the recent market collapse.
There's probably legit uses in finance for LLMs, in exploring potential scenarios and strategies, spit-balling ideas, summarizing financial news. Sure. Great. Maybe even as a trading agent, questionable, but I'd buy that as maybe happening.
But replacing Bloomberg terminals with "Chat with NYSE", that is no exaggeration one of the most out of touch ideas I think I have ever heard in my life!
My experience is that in most of small companies, the revenue extraction cycle from big SaaS suites has gone far enough that people are moving to self-hosted (or rather colocated with a local-ish provider that installs and provides unofficial support) software, like they used to do before the great plague.
Considering how Zipf's law works, there might be a huge discrepancy coming on as we see the products deteriorating from all the AI and H1B spaghetti code to the point where LibreOffice appears quite competent by comparison. Most of the people I worked with just want to sell lamps or furniture or trumpets or whatever they do, and the inventions of modern SaaS make this a lot harder to do. Once enough small businesses stop paying their 5-user subscriptions, I think this whole thing will pivot heavily into the favor of those that just maintained their product well and didn't ensloppify it in the mantime.
I can follow the arguments, and I find many of them plausible. But LLMs are still unreliable and require attention and verification. Ultimately, it's an economic question: the cost of training the model and the computing power required to produce accurate results.
The strongest argument is the one about the interface. LLMs will definitely have a large impact. But under the hood, I still expect to see a lot of formally verified code, written by engineers with domain knowledge, with support by AI.
I think this is more interesting as a rubric than as a prediction. I agree with some of it and not with others; I don't know if we're "cooked" or not; I do like how they've broken vertical software's moats down though.
1. I don't buy that chat interfaces will replacing existing user interfaces. I'm in particular a little bit familiar with Bloomberg's user culture. I don't know that I buy that it's going to be replaced with LLM chat prompts. But software agents are going to make faithfully reproducing those existing user interfaces much easier, so: half credit?
2. Half credit again on LLMs vaporizing the "business logic" moat, because the vertical-specific rules that justified the original software market are I think a lot harder to encode in Markdown than the 1 week they gave it, and also verification becomes a bear as more ground-truth business logic is replaced with nondeterministic AI output. There's a thing happening here for sure, I just don't buy it's as decisive as they say.
3. Public data access: I 100% buy this. If this was a real moat, it's dead.
4. Talent scarcity: same deal. Remember, we're talking about vertical software, where the underlying technical work is fairly repetitive and best-practices driven; it's the exact slice of software development work LLMs excel at.
5. Bundling (you get IB messaging along with your charting and your news service); maybe. This point feels tautological. Work out what LLMs do to each of the bundled experiences and there's your answer for how resilient that moat is.
6. Proprietary data: I think they're just dead on right here, and it does indeed seem to be a good time to be a company like Bloomberg?
7. Regs lock-in: half credit, because AI does make regs compliance a lot easier, and I think we're at the very early stages of seeing how.
8. Network effects seems like a repetition of "bundling" and if I have a qualm about this rubric it's that they made it look like an even 10, so they could have clean wins and losses.
9. Transaction embedding (ie, being a payment processor or a loan originator) also seems tautological; it's a moat, sure, but they're begging the question of whether AI enables people to stand up viable competitors.
10. I think "system of record" and "transaction embedding" are kind of the same moat.
I wish people would not blog on X (I will call it X when it's used as a crappy blog platform); these ASCII charts are awful. But that's neither here nor &c.
I find this line of thinking so hard to follow. I happen to have worked at FactSet and when I was there we were stuck supporting chromium 18 because it was embedded in the version of the workstation that a partner had signed a contract which prevented them from needing to upgrade the base install. SASS is of course to some extent about functionality. Maybe it will make sense for larger customers to duplicate functionality themselves using AI. I very much doubt we’re anywhere near being able to prompt Claude and get FactSet out but fine we can grant that. The reason SASS is so valuable though is because it allows firms to pass off the costs and risk of maintenance behind SLAs. Why would you want to bring that risk in-house when you can essentially buy insurance against software errors by paying a SASS company?
Anyway, I dispute that there's "zero switching" costs to go from proprietary keyboard shortcuts to english sentences as the interface.
In the bloomberg example, the shortcuts are precise. LLM's responses are not always what you want.
Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality.
"Public Data Access → Commoditized"
Also, no. Today I tried to have gemini pro give me some data from wikipedia for a list of countries that I supplied. It gave me data and source links, but the numbers were all wrong! I would have zero confidence in this for anything serious.
Even if it wasn't generated by AI, it reads like an advertisement for some company which sure sounds like a wrapper on top of a LLM. I think the moat for that type of company is a lot less defensible than any of the Vertically Integrated category leaders by a country mile.
> Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality.
This has already happened for a non-negligible amount of people on this site. I still use magit to prepare commits and review diffs. Everything else is English and Claude code or opencode.
Ironically, part of the reason I like emacs and formerly liked vim was because it reduced the amount of time my hands had to leave the keyboard. I simply look where I want to type, press the chord to jump with avy, and then begin typing. New tools are spiritually aligned with this goal. I look at the screen, I think about what I don’t like, and now instead of translating the criticism into code changes, I just stream my thoughts directly into the tool.
> Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality.
As a former vim user who uses cursor, I've found that as the models get better I'm typing less and less. I appreciate the vim key bindings, but eventually I can imagine not missing them.
So many hallmarks of LLM authorship (the arrows, the framing, the unnecessary fluff, the big important-sounding words). Not to mention the vested interests of the author. Let’s just call it what it is: bullshit. No signal, just noise.
I’m sick and tired of people forgetting that with every field, the first 95% is easy, the last 5% is almost insurmountably hard and what people get paid for.
Yelling “it’s 95% there, we’re so cooked” when anyone can be 95% there for any field since Google was invented doesn’t show much.
While I think LLMs can improve the interface and help users learn/generate domain specific languages, I don’t see how a professional can trust an llm to get a technical request like this correct without verification. Wouldn’t a financial professional trust the Bloomberg llm agent that translates their request into a set of Bloomberg commands more?
SaaS stocks are currently the buying opportunity of a lifetime.
But for my startup I still use a ton of SaaS services for things that I could probably do just fine myself. (Clerk/StackAuth, Supabase/PlanetScale, Cloudflare STUN/TURN, Clickhouse, Vercel, Calendly, Google Workspace, ngrok, Tailscale).
Spiritually, I hate using these. Any one of these would be dead-simple to replace. But my time is genuinely better spent on my startup’s particular value-add. Maybe I’ll replace these some day when we can hire someone to manage internal replacement services - some of which are as easy as “a postgres database” or “wireguard on some VPS instances”. But it’s just not worth my time right now when I’m focused on building revenue.
Even if they all cost $300/mo in total, and we’re bootstrapped, it’s a lot easier to cut back on UberEats or shiny nerdy toys than it is to replace all of these SaaS offerings. I recognize there’s a lot of ”I don’t know what I don’t know” and I’m liable to subtly misconfigure something in a potentially disastrous way.
But replacing Bloomberg terminals with "Chat with NYSE", that is no exaggeration one of the most out of touch ideas I think I have ever heard in my life!
Considering how Zipf's law works, there might be a huge discrepancy coming on as we see the products deteriorating from all the AI and H1B spaghetti code to the point where LibreOffice appears quite competent by comparison. Most of the people I worked with just want to sell lamps or furniture or trumpets or whatever they do, and the inventions of modern SaaS make this a lot harder to do. Once enough small businesses stop paying their 5-user subscriptions, I think this whole thing will pivot heavily into the favor of those that just maintained their product well and didn't ensloppify it in the mantime.
The strongest argument is the one about the interface. LLMs will definitely have a large impact. But under the hood, I still expect to see a lot of formally verified code, written by engineers with domain knowledge, with support by AI.
1. I don't buy that chat interfaces will replacing existing user interfaces. I'm in particular a little bit familiar with Bloomberg's user culture. I don't know that I buy that it's going to be replaced with LLM chat prompts. But software agents are going to make faithfully reproducing those existing user interfaces much easier, so: half credit?
2. Half credit again on LLMs vaporizing the "business logic" moat, because the vertical-specific rules that justified the original software market are I think a lot harder to encode in Markdown than the 1 week they gave it, and also verification becomes a bear as more ground-truth business logic is replaced with nondeterministic AI output. There's a thing happening here for sure, I just don't buy it's as decisive as they say.
3. Public data access: I 100% buy this. If this was a real moat, it's dead.
4. Talent scarcity: same deal. Remember, we're talking about vertical software, where the underlying technical work is fairly repetitive and best-practices driven; it's the exact slice of software development work LLMs excel at.
5. Bundling (you get IB messaging along with your charting and your news service); maybe. This point feels tautological. Work out what LLMs do to each of the bundled experiences and there's your answer for how resilient that moat is.
6. Proprietary data: I think they're just dead on right here, and it does indeed seem to be a good time to be a company like Bloomberg?
7. Regs lock-in: half credit, because AI does make regs compliance a lot easier, and I think we're at the very early stages of seeing how.
8. Network effects seems like a repetition of "bundling" and if I have a qualm about this rubric it's that they made it look like an even 10, so they could have clean wins and losses.
9. Transaction embedding (ie, being a payment processor or a loan originator) also seems tautological; it's a moat, sure, but they're begging the question of whether AI enables people to stand up viable competitors.
10. I think "system of record" and "transaction embedding" are kind of the same moat.
I wish people would not blog on X (I will call it X when it's used as a crappy blog platform); these ASCII charts are awful. But that's neither here nor &c.
The overall index has been pretty well flat. What sectors gained?
And surely there aren't 140 "software and services" companies in the top 500 by market cap?
Data centers and AI.
The current US economy is flat except for AI and data centers.[1]
[1] https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-...
I’m also pretty sure S&P doesn’t maintain a ‘S&P 500 Software & Services Index‘.
There is a ‘S&P Software & Services Select Industry Index’ with 140 constituents. That’s probably the index in question.
Its another ad, no?
Anyway, I dispute that there's "zero switching" costs to go from proprietary keyboard shortcuts to english sentences as the interface.
In the bloomberg example, the shortcuts are precise. LLM's responses are not always what you want.
Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality.
"Public Data Access → Commoditized"
Also, no. Today I tried to have gemini pro give me some data from wikipedia for a list of countries that I supplied. It gave me data and source links, but the numbers were all wrong! I would have zero confidence in this for anything serious.
This has already happened for a non-negligible amount of people on this site. I still use magit to prepare commits and review diffs. Everything else is English and Claude code or opencode.
Ironically, part of the reason I like emacs and formerly liked vim was because it reduced the amount of time my hands had to leave the keyboard. I simply look where I want to type, press the chord to jump with avy, and then begin typing. New tools are spiritually aligned with this goal. I look at the screen, I think about what I don’t like, and now instead of translating the criticism into code changes, I just stream my thoughts directly into the tool.
As a former vim user who uses cursor, I've found that as the models get better I'm typing less and less. I appreciate the vim key bindings, but eventually I can imagine not missing them.
Yelling “it’s 95% there, we’re so cooked” when anyone can be 95% there for any field since Google was invented doesn’t show much.