GenAI isn't a threat to labor, it's a threat to lazy software.

Look, I don't have any great love for this current version of genAI. I was one of the inventors of the Automated Insights platform, the first commercially available genAI engine, all the way back in 2010. The idea behind the tech was the same then as it is today -- computers turning data into words (and eventually audio, visuals, and video) to achieve more meaningful input and output. The big difference today is the much broader application of said tech. However, I also believe that the motive behind the tech also remains the same as it was when we started selling genAI over a decade ago. And talking about that motive is where I keep getting into trouble. I don't get dragged often, but I got dragged when I said that this wave of AI was potentially going to end the current, and now dated, flavor of SaaS. This is why corporations and investors are all throwing money at anything with "artificial" or "intelligence" stamped on it. Certain people who should know better screamed at me: "You don't even know what SaaS is!" Yeah. I do. The AI versus SaaS battle is going exactly where I said it was going to go, and here's where it's going next. What I Said I said users don't want another screen. SaaS happened because users didn't want to install and maintain software. There came an inflection point when users decided they could live without a subset of functionality, privacy, security, and processing speed if it meant being able to move to a cloud-based, subscription software model. But the evolution of SaaS didn't stop there. When the mobile-first movement happened, users again decided they could live without screen real estate, and ease of textual input, and they would even take another hit to functionality and processing speed if it meant being able to work in a mobile UI. In both cases, the game of SaaS changed completely, and a lot of the players got left behind. My conclusion: The reason the current players are all panic-investing in genAI is because it represents not just another shift in UI, but the potential to completely change the interpretation of input and output in that it purports to eliminate screens altogether. Once users decide they're willing to live without those screens, genAI exposes SaaS as just a clunky middleman between you and your data: Developers of software and apps will no longer be able to get away with just barfing out aggregated and summarized data back to the user for them to make their own business decisions. When people talk about the uselessness of apps like Google Analytics 4 (GA4), which is actually very useful for people who know how to crunch the data, this is what they're talking about. You know what happens to middlemen during innovation cycles? They get disappeared. What OpenAI (and Google) Are Up To OpenAI released its newest model, GPT-4o, on May 13, and the references to the movie Her -- in which Scarlett Johansson voices a futuristic AI companion -- began immediately. Allegedly, this was by design and somewhat shady. On the surface, the GPT-4o release was a large number of textual, audio, and video improvements. But it doesn't take a data scientist to figure out that the thread between all these improvements was a major upgrade in the interpretation of user input and output. For example, GPT-4o can "look" at a screen of computer code (input) and "summarize" what that code is doing (output). Obvious and somewhat unrelated question: Why does GPT-4o even need a screen to do this? Obvious answer: It doesn't. Anyway, the very next day, May 14, Google held its I/O event and used AI to tell the audience that the company mentioned "AI" in the keynote 120 times. Google is not far behind OpenAI at this point. It announced several new entrants and updates around inputs and outputs, including audio, video(!), and the already hyper-advertised Circle to Search. This is not about chatbots or companions. If you think these advancements aren't coming for the current crop of SaaS players ... well, OK then, let's talk about what SaaS really is. What SaaS Really Is SaaS is not just software in the cloud. SaaS is not just subscription-based software. You can call both of those things SaaS if you want, but you might as well be calling SaaS anything developed after 1990s desktop software. You have to get purposefully vague with the definition of SaaS to stop there. Making the argument that genAI isn't a threat to today's SaaS software empire is akin to making the argument that electric vehicles aren't a threat to today's ICE vehicles because Teslas still have four wheels and an engine. Yet Ford responded to that threat by eliminating production of all, not most, ALL of its ICE sedans. Most other automakers did something similar. Shortsighted? Maybe. But way less shortsighted than blowing off the threat entirely and losing your R&D budget, then your market share, and then your job. Why GenAI Is a SaaS Play and Not an AI Play My problem with genAI is that it's still mostly Gen and not enough AI. It isn't about machines doing the work. It's about machines interpreting the data required to do the work. Left in a vacuum, i.e., without the right prompt, genAI produces mostly random garbage. Even with the right prompt, it sometimes hallucinates and definitely misfires. When I talk about genAI versus SaaS, I'm not just talking about where the processing happens. I'm not talking about how you pay for it. I'm talking about what control over the input and output means to the question of who controls the software. In that argument, software has always been a service, whether the input and output took place on a mainframe, a desktop, or a mobile app. Screens are about input and output. No one ever controlled the keyboard. No one ever controlled the graphical display. OpenAI and Google? They aim to control both input and output. Call it the "interpretation layer." Whoever can best interpret and simplify the question being asked and the answer being produced ... wins. That's a massive threat to what we're calling SaaS today. EXPERT OPINION BY JOE PROCOPIO, FOUNDER, TEACHINGSTARTUP.COM @JPROCO