THE APEX TIMES
In a broader market selloff tied to fears that AI labs will build applications that replace established enterprise software, Chamath Palihapitiya argued the “first victims” are unlikely to be the most entrenched cloud platforms such as Salesforce and ServiceNow.
Software stocks slid sharply as investors weighed a new wave of competition: AI labs developing “AI-native” applications that could reduce the need for some existing software categories. In market commentary carried by Yahoo Finance, Chamath Palihapitiya described the concern as a move “up the stack,” where newer tools could displace incumbents that currently sit closer to business processes and workflows.
The selloff was broad enough to include at least one high-profile enterprise platform company. ServiceNow, a provider of workflow software often used for IT and operations, fell 34% over the prior week, according to the commentary. The same report said 81% of software stocks were down during the pullback, underscoring how quickly sentiment shifted across the sector.
Against that backdrop, Palihapitiya said he does not expect the earliest casualties to be Salesforce or ServiceNow. His framing was that even if AI-enabled tooling accelerates change, the first wave is more likely to be felt by companies building newer, narrower applications rather than the deepest infrastructure layers of enterprise software. He characterized AI-native startups as the more immediate competitive threat to existing software vendors.
The argument hinges on how quickly AI products can replace established enterprise systems. Salesforce, for example, is widely associated with customer relationship management and related enterprise applications. ServiceNow is associated with workflow and automation across an organization. In Palihapitiya’s view as reported, those platforms are less likely to be the first replaced, even as AI-native competitors emerge at higher velocity.
What Palihapitiya offered as a counterweight to bearish expectations was a sequencing thesis: the market may be reacting to the idea that AI labs will build apps that replace established software, but the replacement path may start with adjacent tools and newer products, not the largest entrenched platforms all at once.
For Salesforce, the immediate takeaway from the current debate is less about specific product changes and more about investor perception. A rise in AI-native competition can influence valuation even when an incumbent has not disclosed material defensive actions, especially during periods where broad “AI replacement” narratives drive sector momentum.
However, the commentary does not provide details on any concrete contract changes, specific product launches, or measurable customer churn for Salesforce or ServiceNow. It also does not specify which AI labs or startups are expected to build the replacement applications, or the timelines for any displacement. In the absence of those specifics, the market implication remains a sentiment and scenario question rather than an announced operational shift.
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