SaaS, now more broadly understood as cloud software, has evolved from a delivery model into a broad category that underpins how modern enterprises operate, measure performance, and allocate spend. But the opportunity set within cloud software is far from uniform, and AI is reshaping the landscape.
Within this large and growing category, we are most excited about three areas where we see durable demand, measurable ROI, and pathways to enduring differentiation: frontier AI platforms and infrastructure, cybersecurity, and data infrastructure. This edition focuses on frontier AI platforms and infrastructure, where model capability meets operational reality.
In some segments, AI is expanding the addressable market and pulling spend forward as enterprises move from experimentation to deployment. In others, it is compressing differentiation, accelerating feature convergence, and shifting value toward platforms with proprietary data, distribution advantages, and embedded workflows.
We see an inflection point. Foundational model capabilities are translating into real enterprise value creation as companies across industries move from pilot programs to production-grade AI systems that drive measurable ROI through revenue uplift, cost reduction, and operational leverage. The next three to five years represent a critical buildout phase, particularly across model serving, fine-tuning, evaluation, and the broader infrastructure required to support AI in production – areas that remain underpenetrated relative to demand.
As AI workloads move into production, theory gives way to constraints. Latency, throughput, uptime, security, compliance, and cost per unit of work become gating factors. Performance under live enterprise conditions – not demo environments – will separate durable winners from feature-rich followers.
We believe the enterprise AI software market will compound at 30%+ annually through 2030. Value will flow to the players that can continually improve performance and efficiency under live usage, deliver enterprise-grade controls, and make ROI auditable for customers. As AI features proliferate, enduring value should shift toward platforms that combine technical performance with enterprise readiness and clear economic return.
Cloud software is not being displaced by AI. It is being redefined by it.
